5 Reasons Bitcoin Is Rising as an Inflation Hedge Today

Bitcoin May Rival Gold as Inflation Hedge Over the Next Decade

At Paris Blockchain Week 2025, Blockstream CEO Adam Back highlighted Bitcoin’s potential to outperform gold as an inflation hedge, citing a predicted inflation rate of 10% to 15% in the coming decade. With monetary instability on the rise, Back emphasizes that Bitcoin’s scarcity makes it a valuable store of value amidst growing economic uncertainty.

Background and Context

The concept of using Bitcoin as an inflation hedge is gaining traction as economic uncertainty and inflation rates rise globally. Recent statements from Blockstream CEO Adam Back at Paris Blockchain Week 2025 highlight the increasing recognition of Bitcoin as a viable alternative to traditional hard assets, especially gold. Historically, gold has been seen as a safe haven against inflation, but the technological advancements and growing scarcity of Bitcoin may soon allow it to rival gold for this purpose.

Inflation has been a persistent issue, with major currencies experiencing a more than 50% increase in supply over the last five years. This monetary expansion has led to significant concerns about purchasing power, prompting investors to seek alternatives like Bitcoin. Back anticipates that with an inflation rate projected to be between 10% and 15% over the next decade, Bitcoin could become a preferred choice for those looking to preserve value.

Recent Developments

The potential for Bitcoin as an inflation hedge has been reinforced by regulatory changes and the approval of Bitcoin exchange-traded funds (ETFs) in the U.S. market. These factors, along with a more crypto-friendly political environment, may accelerate Bitcoin’s adoption, further establishing its role alongside gold as an essential asset in a diversified portfolio.

Bitcoin as Inflation Hedge: A New Era for Cryptocurrencies

During the recent Paris Blockchain Week 2025, Blockstream CEO Adam Back emphasized that Bitcoin as an inflation hedge may gain significant traction over the next decade. With rising inflation projected to average between 10% and 15%, investors are seeking alternatives that provide a store of value amidst economic uncertainty. Back noted, “The inflation rate is probably 10% or 15% for the next decade, an investment return that is very hard to get with stocks or housing rentals.” This dramatic shift may position Bitcoin to challenge gold’s traditional status as a reliable hedge.

Bitcoin vs. Gold: A Scarcity Comparison

Back compared Bitcoin to gold, highlighting its scarcity and growing acceptance as a viable investment. He explained, “Bitcoin has the advantage of being like gold — it’s a scarce asset but also undergoing an adoption curve.” Despite experiencing a 30% correction from its all-time high of over $109,000, Bitcoin’s appeal continues to expand, fueled by concerns over monetary policy and inflation.

Impact of Monetary Policy on Bitcoin Adoption

Significant increases in currency supply from major economies such as the US and European Union—over 50% in the last five years—are expected to drive adoption of Bitcoin as an inflation hedge. According to Back, “Eventually, that money is used to buy all the goods, which means they will rise in price, particularly hard assets like housing.” Additionally, the Federal Reserve Bank of Cleveland’s data forecasts a nominal 10-year inflation rate of 2.18%, while a University of Michigan survey anticipates consumer expectations of 5% inflation over the next year.

Factors such as the approval of US-based spot Bitcoin ETFs and a crypto-friendly regulatory environment under President Trump may further accelerate Bitcoin’s adoption as a hedge against inflation. Back remarked, “US regulators approved the ETFs, finally, and the current US administration is removing a lot of negative regulation that was intended to slow down crypto adoption.” The convergence of these trends suggests that Bitcoin could become a prominent player in the investment landscape, rivaling gold in the long-term battle against inflation.

Bitcoin Poised to Compete with Gold as an Inflation Hedge

In a recent statement at Paris Blockchain Week 2025, Blockstream CEO Adam Back suggested that Bitcoin could emerge as a formidable competitor to gold as an inflation hedge over the next decade. With inflation rates expected to soar between 10% and 15%, traditional investment avenues like stocks and real estate might struggle to deliver returns that keep pace with rising costs.

This shift underscores the growing importance of Bitcoin as an alternative asset. As central banks increase the money supply, the data indicates a clear trend towards greater Bitcoin adoption among investors seeking to protect their wealth from eroding purchasing power. Back highlighted the parallels between Bitcoin and gold, emphasizing Bitcoin’s scarcity and its evolving reputation as a store of value.

Implications for Investors

For investors, this perspective could signify a broader transition to include Bitcoin as a key part of diversification strategies aimed at mitigating inflation risk. As regulatory frameworks become more supportive, particularly with the approval of Bitcoin ETFs and a pro-crypto political climate, Bitcoin’s role as an inflation hedge is likely to solidify.