Over the past 12 months, bitcoin has been better than gold as a hedge against inflation.
This is what Anthony Pompliano reports on Twitter, pointing out the huge difference there has been in the performance of the two assets over the past year.
Return over the last 12 months:
Bitcoin is the true inflation hedge.
— Pomp 🌪 (@APompliano) August 3, 2021
In fact, gold was worth around $1,960 an ounce this time last year, while it has now fallen to just above $1,800.
In other words, in the last 12 months, it has lost almost 10%.
Actually, up until the end of March, the loss was even heavier (-14%), but then it recovered a bit.
Bitcoin, on the other hand, was worth around $11,000 at this time last year and is now hovering around $38,000, more than three times as much.
In fact, until April it was more than five times more expensive than it was 12 months ago, but then it dropped.
Inflation in the US, on the other hand, has been 5.4% over the past 12 months, and started to rise in February.
In fact, it had been below 1.5% until January, but by February it had risen to 1.7%, with growth accelerating from March onwards and then exploding in April.
Looking only at the last six months, i.e. from February to June, the price of gold fell by 1.4% overall, albeit first with a sharp fall until March, and then a sharp rise from April to May, followed by a further fall.
By contrast, the price of bitcoin has risen by 18% since February, albeit with a real surge until April, a sharp fall until 20 July, and a rise from 21 July.
So whether we look at the last 12 months, the same period over which annual inflation is calculated, or just the last 6 months since US inflation spiked, bitcoin still beats gold by at least an order of magnitude.
Gold and bitcoin in times of crisis
However, it is worth remembering that although gold and bitcoin can both be regarded as inflation hedges, they differ financially in at least one respect: gold is considered risk-off, whereas bitcoin must of course be considered risk-on. This makes gold a preferred safe haven in times of crisis, while in times of growth many investors tend to focus on BTC because of its higher volatility.