Jack Dorsey isn’t the only billionaire predicting hyperinflation and betting on cryptocurrency to fight off higher prices

Jack Dorsey isn’t the only billionaire predicting hyperinflation and betting on cryptocurrency to fight off higher prices
Twitter chief executive (CEO), Jack DorseyWikimedia
  • Twitter CEO Jack Dorsey is not the only billionaire worried about the rate of inflation and its impact on the global economy.
  • Mike Novogratz, Paul Tudor, and others also have concerns and are betting on Bitcoin as the hedge to preserve the value of their assets.
  • Bitcoin is largely being seen as an inflation hedge by investors, according to many experts and reports.
Late last week, Twitter’s chief executive Jack Dorsey warned everyone that hyperinflation may hit the US and other countries soon. This, alongside Dorsey’s vocal support for Bitcoin has led many to take the warning as an indicator that this might be a good time to buy Bitcoin. “Hyperinflation is a currency collapse. Worst possible outcome for most. Be careful what you wish for,” said one reply to Dorsey’s tweet.

The tweet may not have been met by unanimous support so to speak, but Dorsey isn’t the only crypto supporter who has warned of such a future. As reported by Business Insider in August, billionaires Mike Novogratz and Charles Hoskinson had said that owning digital assets could have helped people suffering in Afghanistan during the country’s recent cash shortage.

Further, a Bloomberg report last week said that Bitcoin’s recent price rise was driven by the perception that the world’s oldest cryptocurrency can offer a better inflation hedge than gold. And, inflation isn’t going anywhere anytime soon. Often called the ‘necessary evil’ to facilitate economic growth, inflation was seen rising above average for nearly every country in the world during the COVID-19 pandemic.

It was, however, expected to come down to normal levels by now. Instead, US Federal Reserve Chairman Jerome Powell said recently that inflation is expected to continue longer than previously expected.

Why is Bitcoin believed to be a hedge against inflation?

"Part of Bitcoin's mission is to give the world a ledger where wealth can be stored safely, where governments can't come and take your money, they can't deflate it away," Novogratz said during an investor call recently.

When inflation rises, the value of money depreciates. Simply put, as things get more expensive, you can buy less stuff with the same amount of money.

Investing in assets that are almost definitely going to appreciate is how many investors hedge against this drop — ensuring that they can buy the same bundle of goods as before keeping their purchasing power intact. In other words, the net value of one’s investment remains positive even if inflation affects their overall portfolio.

Paul Tudor Jones, the founder of asset management firm Tudor Investment Corp, has also echoed these thoughts. “Clearly, there’s a place for crypto. Clearly, it’s winning the race against gold at the moment … It would be my preferred one over gold at the moment,” he said earlier this month. Shark Tank star Kevin O’ Leary had also said that his “crypto exposure” had outweighed gold.

At the time of Dorsey’s tweet, Bitcoin had once again surpassed the $60,000 price point, which is a price rise of over 125% over the past year. On the other hand, the price of gold had fallen by just under 10% during the same period.

Ethereum may offer the best returns, but investors have been pulling away over the last two weeks

Bitcoin’s rally is far from over — these analysts are betting on the world’s largest cryptocurrency to more than double in value by the end of year