They are always looking for ways to store value outside of the local currency,” Julián Colombo, a senior director at Bitso, a major Latin American cryptocurrency exchange, told Cointelegraph.“Bitcoin and stablecoins allow them to bypass capital controls and protect their savings from devaluation.”Argentina inflation index.Source.Truflation.
In a Journal of Economics and Business study, authors Harold Rodriguez and Jefferson Colombo said, “Based on monthly data between August 2010 and January 2023, the results indicate that Bitcoin returns increase significantly after a positive inflationary shock, corroborating empirical evidence that Bitcoin can act as an inflation hedge.” However, they noted that Bitcoin’s inflationary hedging property was stronger in the early days when institutional adoption of BTC was not as prevalent.
In this environment, cryptocurrencies have emerged as a viable alternative for preserving the value of money, allowing individuals and businesses to bypass the limitations of the traditional financial system.” While Bitcoin's effectiveness as an inflation hedge is still up for debate, stablecoins have become a more practical solution in high-inflation economies, particularly those pegged to the US dollar.
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Author / Journalist: Cointelegraph by David Feliba
The story "Bitcoin’s role as an inflation hedge depends on where one lives — Analyst" has 1427 words across 55 sentences, which will take approximately 6 - 12 minutes for the average person to read.
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