Bitcoin Behaves More Like a Liquidity Gauge Than an Inflation Hedge, NYDIG Finds
Bitcoin’s reputation as “digital gold” and a hedge against inflation doesn’t stand up to data scrutiny, according to new research from NYDIG.
In its latest weekly report, NYDIG’s Global Head of Research, Greg Cipolaro, said that while Bitcoin is often marketed as protection against inflation, the evidence tells a different story.
“Our analysis shows that Bitcoin’s correlations with inflation metrics are neither strong nor consistent,” Cipolaro wrote, noting that inflation has rarely served as a meaningful driver of Bitcoin’s price action.
Gold, the traditional inflation hedge, also struggles to maintain a stable relationship with inflation. NYDIG found that gold’s correlation with inflation has at times turned negative, challenging the long-held assumption that higher prices naturally boost the metal’s value.
Instead, both Bitcoin and gold appear to respond far more closely to real interest rates and global liquidity trends.
For gold, falling real (inflation-adjusted) rates have historically coincided with price increases. Bitcoin, as it matures within global markets, is showing a similar pattern — strengthening its inverse relationship with real rates in recent years.
The implication, according to NYDIG, is that Bitcoin’s value is now more tied to liquidity cycles and capital flows than to changes in consumer prices.
“From a macro perspective, gold remains a hedge against real rates, while Bitcoin has evolved into a liquidity barometer,” Cipolaro concluded.
At last check, Bitcoin (BTC) traded around $115,046, per CoinDesk data.
