Bitcoin (BTC) is gradually losing the confidence of investors as a potent hedge against inflation. Previously often touted as a safe haven from the economic effects of macroeconomic conditions, Bitcoin appears to be falling short of this status of late. Amidst new realities, Anthony Scaramucci has noted that the asset has not yet attained the status of an effective inflation hedge.
Scaramucci thinks BTC is still too young to be an inflation hedge
Speaking on CNBC’s Squawk Box on Monday, SkyBridge Capital’s CEO Scaramucci discussed the current conditions of the crypto markets.
I’ve said consistently on this show that Bitcoin still is not a mature enough asset to be regarded as a potential inflation hedge,
Scaramucci said.
He noted that the asset has not yet grown enough to assume the position of a hedge against inflation. Scaramucci highlighted BTC’s current wallet bandwidth as the major reason behind his assertion. He revealed that the asset’s bandwidth was about 80 million wallets when he purchased his first BTC, per Glassnode. He further stated that at this point, there are probably 300 million wallets globally.
Scaramucci added that BTC cannot hedge against inflation until wallet bandwidth reaches the billion and billion plus level. “It is still an early adapting technical asset,” he concluded. Notwithstanding, on the plus side, Scaramucci pointed out BlackRock’s recent interest in BTC as an indication of growing institutional demand.
Bitcoin has been hit hard by macro conditions
Anthony Scaramucci remains one of the prominent figures out there that are bullish on Bitcoin. In October of last year, Scaramucci noted that he has over $1B in BTC, speaking with CNBC. The accomplished financier mentioned then that he sees BTC as digital gold.
According to Scaramucci, any investor that actually looks into Bitcoin will be compelled to invest in the asset class. He cited Ray Dalio as an example. Dalio, who was once a skeptic, noted in December of last year that he already owns some Bitcoin.
Bitcoin, which was once acclaimed for its immunity against inflation especially during the turbulence of the COVID-19 pandemic, appears to be failing with traditional stocks as macroeconomic conditions hit hard. Market watchers have attributed this sudden trend to BTC’s recent correlation with traditional finance.
The asset currently trades at $21,305 at the time of writing, having dipped by 11.9% in the past week.
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