Is this stagflationary environment one where Bitcoin could thrive?
We’re seeing the economy weaken, while at the same time rising oil prices are pushing inflation higher. That combination is starting to look a lot like stagflation.
This has put U.S. Treasury investors in a bit of a predicament. While war and uncertainty can increase bond demand as a safety play, rising inflation means investors are looking for assets that can outperform inflation. That’s a major reason why we aren’t seeing stronger demand for Treasuries right now.
At the same time, gold has surged 68% over the past year, and some investors may feel the upside is more limited after such a strong run.
Then there’s Bitcoin — down 38% over the past six months and still only a fraction of the size of gold. In a stagflationary environment, Bitcoin could start to look like an undervalued safe-haven asset with significant upside potential.
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