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Here’s part 2 of “While Inflation Touches Record Highs In 13 Years, Over 46M Americans Turn To Bitcoin.” Make sure you read “Part 1” first before proceeding further. Happy Reading!
Previously: The Breakdown with NLW, allegedly “one of the most exciting podcasts on earth,” recently had an exclusive on “46M Americans Now Own Bitcoin as Inflation Rises to Highest Level in 13 Years.” As mentioned in the first part, inflation rates are undeniable; figures can’t be overlooked. The chief U.S. economist at Barclays, Michael Gapen, said, “transitory pandemic influences clearly contributed to the surprise, but there’s residual firmness in core inflation that’s hard to ignore.”
Indeed the government must be taking some actions, right? And what does Bitcoin have to do with this? Why does the growing number of American Bitcoin owners matter? Here’s the answer to all your queries and curiosities.
U.S. Inflation: More Than What Meets The Eye
Gapen’s comment raises two key questions, how much has the base effect distorted the number, and how transitory is the real inflation.
According to the base effect, due to the sudden economic crash exhibited last year, even a slight increase in the Price Index will seem large for the next few months. A Twitter user named Stef (@scheplick), on the team at TradingView pointed the same. Meanwhile, in response to the report, Fed Vice Chairman Richard Clarida expressed his surprise, saying, “we have pent-up demand in the economy; it may take some time for supply to rise up to demand.”
Twitter user Nic Carter (@nic__carter) wrote, the authorities began with there won’t be inflation, to it’d be transitory; next, they’ll say “a moderate level is necessary to solve inequality,” and yet will “never, ever admit that they’re not in control.” Then responding to the recent stats, he wrote, “even with all the cautioning and the caveats and the transitory jargon, inflation is still running hotter than the fiat priests projected. still a surprise to the upside.” But the debate isn’t conclusive yet. Joe Weisenthal responded to Nic’s tweet, “Employment running better than expected. Fiat priests vindicated.”
46M or 22% Of The U.S. Adult Population Joins Bitcoin.
Amid all this, the other story swooped in. Dan Held (@danheld), a Bitcoin analyst, tweeted, “46 Million Americans own Bitcoin. 22% of all adults. It’s happening.” That’s some significant turnaround from the 5-10% estimates cited over the past years. His source? A New York Digital Investment Group (NYDIG) “Survey: Bitcoin + Banking,” published on January 13, 2021. The poll was conducted by SurveyMonkey on January 6-7, 2021, among a national sample of 2,184 U.S. consumers and had an error margin of +/- 2.1%.
Since then, the survey has also been cited in NYDIG’s March 31 “Financial Advisors + Bitcoin Survey” and May 5 “Life Insurance + Bitcoin Survey.” The latter, a poll conducted by the same on March 22, 2021, among 1,050 residents with at least $50,000 in annual income, was even referenced by this week’s Newsweek article, wondering if this is a sign of a market top.
However, in contrast, Ryan Selkis (@twobitidiot) retweeted, “It’s not a supercycle there’s just 10x the users, 10x the infrastructure, 10x the assets, and 10x the market cap.”
Connected?
Now, back to the main topic of discussion, are these two stories interlinked?
According to Whittemore, just by surfing Twitter, one can find many Bitcoin critics referring to the recent slight decline in the price chart to argue “it has nothing to do with inflation.” But the perfect retort that “more or less sums up” Whittemore’s take on this is loomdart’s, stating:
“Bitcoin went from 10k to 55k! That’s the inflation hedge. No one sees inflation numbers and then immediately thinks: Okay, this is it; this is what I needed to do to invest in bitcoins.”
Or, in NLW’s terms: “While numbers can come together to create narratives, it’s narratives, not numbers. At least not individual numbers that shape markets most of the time.”
Mr. Pratik chadhokar is an Indian Forex, Cryptocurrencies and Financial Market Advisor and analyst with a background in IT and Financial market Strategist. He specialises in market strategies and technical analysis and has spent over a year as a financial markets contributor and observer. He possesses strong technical analytical skills and is well known for his entertaining and informative analysis of the Financial markets.
