- Brian Armstrong, chief executive officer of Coinbase, argues that Bitcoin safeguards against wage inflation caused by state taxes.
- Because of its set supply, Armstrong believes Bitcoin is less prone to inflation than other monetary systems.
- Major companies like as Goldman Sachs are boosting their holdings of Bitcoin ETFs, indicating a growing interest from institutions.
Musk and Coinbase CEO Armstrong have teamed up to promote Bitcoin as a reserve alternative to price spikes brought on by government expenditure. Armstrong sees Bitcoin as an essential hedge against the risk of inflation because he thinks that unbridled government spending causes currencies to depreciate.
Government Spending Drives Inflation Worries
Armstrong agrees with Musk that relentless government spending drives price hikes by increasing the money supply, which weakens traditional currencies. Even though U.S. inflation dropped to 2.89% in July 2024 from 2.97% in June 2024, Armstrong still focuses on the potential long-term effects.
The U.S. wage rate had been much higher before, hitting 3.70% in September 2023. This history of rising inflation emphasises the ongoing concern over how government spending affects the economy.
Bitcoin as a Reliable Price System
Armstrong, besides criticising government spending, sees Bitcoin as a solid insurance against rising prices. He pointed out that BTC’s fixed supply of 21 million coins makes it less vulnerable to the price hike that typically affects traditional currencies. Armstrong believes buying Bitcoin is a smart way to protect wealth from rising interest rates.
More investors are starting to see BTC as a stable choice during uncertain market times. As world leaders continue to fight inflation, Bitcoin is gaining recognition as a dependable hedge. Armstrong’s support shows that many see Bitcoin as an important part of the financial market.
Rising Institutional Interest in Bitcoin ETFs
Institutional interest in BTC, especially in Bitcoin ETFs, is growing. A Coinbase study found that U.S. spot Bitcoin ETFs had large inflows during Q2 2024, even with market volatility, showing that institutions trust Bitcoin’s potential.
Major firms like Goldman Sachs and Morgan Stanley have increased their Bitcoin ETF holdings. Goldman Sachs now holds $412 million in Bitcoin ETFs, while Morgan Stanley has $188 million. This shows that institutions are becoming more confident in Bitcoin as an investment.
The study also noticed that hedge fund deposits dropped from 37.7% to 30.5%, suggesting a shift in how institutions view the coin. Venture advisors are now taking a leading role in the adoption of BTC by larger organisations.
The post Coinbase CEO Backs Bitcoin as Inflation Hedge with Musk appeared first on Crypto News Land.