Is Bitcoin really a hedge against inflation?

Bitcoin users have been warning of high inflation due to the lax policies of central banks for years. Since the 2008 global financial crisis, central banks around the world have cut interest rates to absolute zero or even lower. Interest rates can be thought of simply as the price of capital. The lower the interest rate, the cheaper it is to borrow funds for your business or other purposes.

Сentral banks are stimulating investment in the economy to support it during difficult times by cutting interest rates. The downside of low-interest rates is that a large amount of new money comes into circulation at the expense of the purchasing power of these same funds.

As we know, the maximum number of BTC units is 21 million, which is theoretically a perfect hedge against inflation. How is it that at a time when inflation is at an all-time high, the price of Bitcoin is fluctuating?

The inflation we are now seeing in supermarkets, in the housing market, and energy prices is the result of years of central bank stimulus with cheap money. The “creation” of new money has already taken place and is now beginning to be reflected in the general price level. The price inflation that we are seeing now is the result of the inflation of the money supply in recent years.

Bitcoin shone during the money supply inflation years between 2009 and 2022. Now we have price inflation and people are struggling to make ends meet. There are few investment opportunities now, and people are feeling the harm of creating money. Bitcoiners, who had been preparing for this for years, felt relatively comfortable. The price of Bitcoin may be struggling right now, but price inflation could open the eyes of many people to the need to invest some of their future savings in Bitcoin’s absolute scarcity.

-Apart from the fact that inflation has already happened and Bitcoin has “benefited” from central and commercial bank money printing in recent years, not everyone invests in BTC for the same reason. While a significant portion of Bitcoiners bought a crypto asset with the idea of ​​never selling it again and using it as a store of value, many investors view Bitcoin as a technological investment. These are the kind of stocks that can be compared to Google, Apple, Amazon, and Tesla, so BTC behaves in somewhat the same way as these assets. However, due to its decentralization, Bitcoin wins.

One of the best ways to protect against inflation is to invest in Bitcoin mining. However, not in the classical one, because the threshold is quite high – a mini farm that will pay off after 2 years and will bring a stable profit – costs about $50,000. Moreover, you need to install, configure and maintain equipment.

The most accessible and popular form of mining is cloud mining. This is a remote model that allows the majority of users to participate in mining and jointly maintain the security of the main network. It is characterized by low cost, ease of management, and stable access to quality assets. You rent power from major players (services) and start mining the desired cryptocurrency.

SunMining company provides “nature-friendly” cloud mining services – renting the capacity of its data centers for users. This is an easy way to mine cryptocurrencies, without the noise from the equipment working at your home and the need to spend a lot of money to purchase it. This saves a ton of effort and time since you don’t need to keep track of the equipment, pay your electricity bills, or take care of it – the equipment is already set up and ready to go.

The first profit can be received immediately after signing the cloud contract. Each contract differs in cost, lease term, amount of leased capacity, and referral bonus level. Payments take place in the world cryptocurrency Bitcoin, which makes the system accessible and safe for every person.

To start using SunMining services, you need to select any available capacity and make payment for the chosen package. Your order will be activated after the successful payment.