Former House Speaker Gingrich Wants Central Banks To Become Bitcoin HODLers

434
US Banks Can Now Provide Custody Services For Crypto Assets - Here's Why Bitcoin Hodlers Are Worried
Advertisement
   

Key takeaways

  • Former U.S. speaker Newt Gingrich suggests that emerging economies adopt Bitcoin to hedge against inflation.
  • Inflation keeps growing in the U.S. even as food, and other goods reach their highest prices in a decade.
  • However, investors are beginning to choose Bitcoin as a hedge asset.

Globally, there are growing concerns over rising inflation and the difficulties that would go hand in hand with it for economies. There is a lot of commentary on the inflation figures being put out by state planners as observers have been watching the rising prices of goods and services closely to see if there are ways out of it.

Former U.S. House of Representatives speaker, Newt Gingrich, is the latest political figure to weigh in on the inflation concerns, suggesting that countries should hold Bitcoin in their currency reserves as a hedge against inflation. Gingrich, who is currently an adviser at the International Bitcoin Advisory Corporation (IBAC) – an Israel-based firm, argued that emerging economies would benefit the most from following such a line of action as they faced the risk of being outplayed by larger economies that called the shots in the global economy with their position and power.

Citing El Salvador as an example, the ex-speaker told Financial Times that Such countries can best protect themselves from inflation and outside influence by adopting Bitcoin. He also revealed that he holds some Bitcoin and is focused on encouraging its adoption as it appears to be the most widely held cryptocurrency.

One way or the other, inflation has been rising significantly in the U.S., especially in 2021. Several reports have noted that market measures of inflation levels including the cost of food and basic consumer goods have climbed to a decade high this month.

Advertisement
   

According to data boutique Statista, the increase in the consumer price index has made all sorts of goods including food, used vehicles, meat, and fuel more expensive as the long-term effects of the pandemic are still bearing down on global supply chains. Notably, used cars are the hardest hit with their cost having risen 24.4% year over year and experts expect the inflation to get even worse with time.

All these factors at play have driven a lot of investors to urgently seek ways to protect the value of their wealth. Bitcoin has also presented itself as a solution to this problem with its track record of being uncorrelated with other assets and being a safe haven asset. Over the years, the argument has only been strengthened as Bitcoin is now even challenging gold for market share as evidence shows.

As inflation rises and people seek to protect their wealth for the future, it will only be natural for the number of retail and institutional investors buying Bitcoin to increase. With increased investors, the price of Bitcoin is also bound to go up. This has already been observed to be in play according to a JPMorgan report that argued that the current surge in the price of Bitcoin was most likely due to growing inflation concerns.