Is $BTC Inflation Proof ? Let’s ask to M. Friedman !
Let’s begin with a quote from Milton Friedman: “Inflation is always and everywhere a monetary phenomenon. " 💵 💵 📉
Inflation occurs when money loses buying power. While politicians might attribute inflation to energy prices, wars, and other factors, the primary cause is often excessive money printing by central banks
=> 🏦 -> 🖨️ -> 💸 💸 💸 = 🥜.
This concept can be summarized by the quantity equation, or the equation of exchange: MV = Py, where:
• M is the money supply,
• V is the velocity of money,
• P is the price level (typically measured by the CPI),
• y is the real gross domestic product.
The equation shows that the price level (P) is directly proportional to the money supply (M). To maintain stable inflation, the production of goods and services (y) must keep pace with the money supply.
Bitcoin ($BTC ) is designed to be inflation-resistant. Its halving system reduces the rate at which new bitcoins are produced, mimicking the scarcity of gold. Unlike central banks, no entity can alter Bitcoin’s issuance rate. Additionally, Bitcoin’s supply can be lost or destroyed (e.g., through lost hard drives), further reducing the available quantity.
These factors suggest that Bitcoin’s buying power may increase over time, making it a potentially inflation-proof asset.
What do you think ? Would trust more $BTC to keep or the dollars 💵 to keep safe your capital ? 😉
