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In recent years the dollar has had an inflation rate of around 2 percent, and it has been higher in the past. Some have advocated using Bitcoin as an alternative to inflationary fiat currency.
But Bitcoin is not a good choice for preserving the value of your cash. Bitcoin’s value is extremely volatile. While Bitcoin’s value has generally increased in the last few years, it has also experienced dramatic declines in value. For example, the currency lost more than half of its value in 2014.
Hence, Bitcoin should be seen as a high-risk investment like a technology stock, not as a stable store of value. If you want a hedge against inflation, the United States Treasury offers inflation-protected bonds for just this purpose.
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What is Bitcoin?
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Can you explain bitcoin in a 2-minute video?
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What’s the case for optimism about bitcoin?
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What will people be able to do with Bitcoin that they can’t do with conventional financial systems?
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Who is in charge of Bitcoin?
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How does the Bitcoin network process transactions?
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Why does the Bitcoin network use such a crazy scheme to process transactions?
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What incentive do people have to help process Bitcoin transactions?
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How do people get bitcoins?
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People have made a lot of money investing in bitcoins. Should I buy some?
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Is volatility going to be a fatal problem for Bitcoin?
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Isn’t Bitcoin just a currency for criminals?
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What’s up with Bitcoin competitors such as Litecoin and Dogecoin?
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Isn’t Bitcoin’s fixed money supply going to create deflationary problems?
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Does Bitcoin have a security problem?
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What is the future of Bitcoin?
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