Before Bitcoin can function as an inflation hedge, according to the CEO of Skybridge Capital, it has to be much more widely used.
Although Bitcoin remains a desirable asset, according to Anthony Scaramucci, CEO of Skybridge Capital, it has not yet attained the “wallet bandwidth” necessary to qualify as an inflation hedge.
The CEO of Global Investment Management claimed Bitcoin was still too much of “an early adopter technical asset” and needed to be held in about one billion wallets before it started to function as an inflation hedge on CNBC‘s Squawk Box on August 22.
“Until you get into the billion, billion-plus zone, I don’t think you’re going to see Bitcoin as an inflation [hedge] as it’s still an early adopting technical asset.”
Although the precise number of Bitcoin wallets worldwide is unclear, estimates put the figure at about 200 million.
Given its fixed number of 21 million coins, some hailed Bitcoin in its early years as a possible inflation hedge.
This story has evolved over time, however, as more evidence has shown that Bitcoin and the stock market are becoming more connected, according to a recent IMF analysis.
Scaramucci said that he was still positive about Bitcoin and the wider cryptocurrency industry.
He cited recent actions taken by BlackRock to create a new private spot Bitcoin trust with Coinbase as the custodian as evidence of the substantial institutional demand for the market leader.
According to Scaramucci, there are now a lot of short positions in the markets, which might lead to individuals having their “faces torn off when they least expect it.”
In a recent interview, Steven Lubka, managing director of private clients at Swan Bitcoin, claimed that Bitcoin should still be seen as an inflation hedge.
Lubka acknowledged that Bitcoin did not effectively serve as an inflationary hedge during this year’s global inflation events.
He thinks that this inflation was primarily brought on by supply shocks as opposed to monetary expansion, which is where Bitcoin excels at acting as an inflationary hedge.
Bitcoin’s price is presently at $21,406, down 69.01% from its all-time high of $69,045 on November 11 of last year.
Coinshare’s chief strategy officer Meltem Demirors said she anticipates that Bitcoin prices will stay flat during the third quarter as the price association between tech shares and cryptocurrencies continues on “Squawk Box” on Monday.