New US inflation data triggers Bitcoin community reactions
The recent news on U.S. dollar inflation spurred a series of reactions from the crypto community, noting that the event should push people toward Bitcoin (BTC). Comments from the crypto community championed Bitcoin as a powerful hedge against U.S. dollar inflation.
The US Bureau of Labor Statistics recently reported a 7.5 percent increase in the all items section of the consumer price index (CPI), the most commonly used indicator for inflation. Following this, Digifox Founder Nicholas Merten explained that the dollar might be worth half its current value in the coming years at the current rate of inflation.
Annual Inflation Hits 7.5%, and that's JUST what the FED is telling us. If this continues:
Now: $1,000 today will be worth
Year 1: $925
Year 2: $856
Year 3: $791
Year 4: $732
Year 5: $677
Year 6: $626
Year 7: $579
Year 8: $536
Year 9: $496
Start assessing your options#Bitcoin
— Nicholas Merten (@Nicholas_Merten) February 10, 2022Citing Merten's tweet, politician Jo Jorgensen expressed her excitement in "participating in Bitcoin" through a Facebook post. On Twitter, crypto analyst Lark Davis also took this opportunity to joke around about selling BTC, his "inflation hedge" while "inflation is going crazy." User MarcTradePro responded, "Of course not! #BTC is the gold of the future, and the future starts now."
Meanwhile, Binance CEO Changpeng Zhao also used this opportunity to promote Bitcoin and Binance Coin (BNB) using his Twitter account.
#bitcoin and #BNB don't have inflation.
— CZ Binance (@cz_binance) February 10, 2022On the other hand, crypto investor Anthony Pompliano deemed it time to share the famous inflation quote from American economist Milton Friedman.
"Inflation is taxation without legislation" - Milton Friedman
— Pomp (@APompliano) February 10, 2022Related: Strong Bitcoin and stocks rally position bulls for victory in Friday’s $860M options expiry
Inflation is the measure of a currency's drop in value resulting in prices for goods and services increasing. This usually happens when the price of an asset drops as the supply grows. For example, if the U.S. keeps printing more dollars, the purchasing power of USD may grow weaker, increasing prices for goods and services. According to billionaire Carl Icahn, a crisis may follow with the way the country is printing money.
On the other hand, BTC has a fixed supply of 21 million, and there will not be any more minted after the last BTC is mined. Because of this, many argue that BTC is a good hedge against inflation.