The Anti-Bitcoin Asset You Likely Forgot About
Worried about inflation? The U.S. Treasury’s Series I savings bonds have a 3.54% interest rate that will only go up as prices rise.
For individual investors who believe price growth is here to stay, inflation-protected U.S. savings bond looks like a no-brainer.
Photographer: Ron Antonelli/Bloomberg
Among the many reasons that investors piled into cryptocurrencies this year was the belief that rampant government spending would erode the value of fiat currencies such as the U.S. dollar (hence the quip “have fun staying poor”). Bitcoin, at least in part, was seen as a hedge against inflation.
Well, the U.S. certainly got a taste of rapid price growth, with the consumer price index increasing 4.2% in April from a year earlier, the highest since 2008, and the core measure (excluding food and energy) jumping 3%. Inflation, in fact, has become the biggest tail risk in markets. And yet even after that report last week, cryptocurrencies couldn’t seem to find their footing, whether because of tweets from Elon Musk or otherwise. That stumbling turned into an outright freefall on Wednesday, with Bitcoin plunging as much as 30% to about $30,000 while Ether fell more than 40%.