Professional investors see Bitcoin as a good hedge against inflation, study

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Three in four professional investors (73%) believe that because there are a finite number of Bitcoins, the cryptocurrency is a viable asset to hedge against rising inflation. This is according to new research (1) from London-based Nickel Digital Asset Management (Nickel), Europe’s largest regulated and award-winning digital assets hedge fund manager founded by senior traders and investment professionals formerly from major financial institutions including Goldman Sachs and JPMorgan.

The survey (1) of institutional investors and wealth managers, who collectively manage around $110 billion in assets, reveals that 78% believe this quality of Bitcoin will result in an increase of the number of wealth managers and institutional investors allocating to the cryptocurrency.

However, Nickel believes that Bitcoins inflationary hedging characteristic will take time to become the dominant narrative. Indeed, Bitcoin’s recent volatility, despite the Fed’s hawkish statements, highlights the crypto currency’s correlation to risk assets. Nickel expects this volatility to change over time, as Bitcoin evolves from a risk-asset to a store-of-value.

Anatoly Crachilov, CEO and Founding Partner of Nickel Digital, clarified:Investors should not view Bitcoin as a safe haven asset at the current early stage of its adoption curve. Bitcoin clearly behaves as a risk-on asset and will remain such until wider institutional adoption takes place. However, this does not undermine Bitcoin’s ability to provide a long-term hedge against inflation term thanks to its immutable, finite supply and credible neutrality, i.e. independence from any single country’s monetary policy”

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