A burst of inflation in 2026 has reignited buzz that bitcoin and other cryptocurrency are a great hedge against inflation.
Bitcoin, the leading digital token, has a fixed supply; not true for the U.S. dollar and other government-issued fiat currency. Not surprisingly, you’ll find some of these proclamations on sites with a crypto focus.
Digital platform CoinDesk raised the notion during the brief bitcoin relief rally in the spring, as inflation was heating up after the war with Iran began on Feb. 28. The theory was that the uptick in bitcoin’s value then further promoted the inflation hedge narrative.
No so fast, says Paolo Pasquariello, professor of finance at the University of Michigan.
“I read on blogs that people recommend crypto as a hedge to protect yourself against inflation,” Pasquariello told me in phone interview.
“Absolutely not true. Crypto is a bubble of its own.”
He’s seen no evidence that cryptocurrency will provide any protection against inflation, as might be the case if a cryptocurrency’s value could be expected to climb at a much faster pace than the rate of inflation in the United States.
His recommendation is that everyday savers shouldn’t jump at tips they see on social media about buying bitcoin as an inflation hedge.
Why do you want an inflation hedge?
The reality is that no one wants to cut back on their standard of living. Everyone would prefer to be able to spend just like they used to and buy what they want. But how do you do that when everyday prices are high and climbing higher?
Naturally, people start talking more about inflation hedges when there’s an uptick. It can get a little funky. Buying art — yes, paintings and the like — became the big buzz when inflation was sizzling in the 1970s and early 1980s.
Sure, cryptocurrency didn’t exist 40 or 50 years ago, making a historical track record as an inflation hedge a bit tough.
Bitcoin, created in 2009, is a digital currency that can be used to buy goods or services with relative anonymity and without the need for a central authority, such as a bank or government.
Yet, Pasquariello maintains that cryptocurrencies do not have any intrinsic value. They’ve not succeeded yet at being universally adopted where many people use bitcoin or other cryptocurrencies as means of payment.
“Do you get your salary amount in crypto? No,” he said. “Do you go to shop at Whole Foods or Trader Joe’s paying crypto? No.”
Pasquariello sees cryptocurrency as a speculative play for people who have extra money on hand — something that easily could go down in value when the economy takes a dive and wealthy people once again start watching their pennies. (As pennies have had periodic shortages, I suppose that’s true if they can still find any pennies in circulation.)
“When times are bad, people stop playing with toy money,” Pasquariello proclaimed.
Cryptocurrency, of course, triggers plenty of contentious conversations. We have the love-it and hate-it camps, not much in between.
Cryptocurrency could still be heading to your 401(k)
The Trump administration has embraced cryptocurrency at various points. Last September, I wrote about how many 401(k) investors one day could get access to cryptocurrency, private equity and other alternative investments in retirement savings plans at work, thanks to an executive order signed by President Donald Trump on Aug. 7, 2025.
In his executive order, Trump blamed “regulatory overreach and encouragement of lawsuits filed by opportunistic trial lawyers” for stifling investment options, such as crypto, in 401(k)s.
Days after the executive order was signed, bitcoin hit a then all-time high in trading of $124,457 on Aug. 14. Much of the rally kicked off in late 2024 on the theory that a second Trump administration would offer a friendly, regulatory environment for cryptocurrencies. Bitcoin reached an all-time peak in early October 2025 at around $126,000.
Bitcoin had its big bumps in 2026
Even so, 2026 hasn’t been a great year so far for bitcoin. The largest cryptocurrency was trading around $62,800 on Thursday, June 18.
Yes, we’re talking about roughly a 50% drop in value in less than a year.
Sure, bitcoin more than doubled in value from the start of 2021 through November 2021 when inflation was cooking and bitcoin reached what was then its all-time high of around $69,000. We can look at that ride as some possible reasoning for this inflation-hedge theory.
Inflation cooled off for a while but started heating up in 2026 after the Iran war started. The Consumer Price Index for All Urban Consumers increased 0.5% month-to-month in May, after rising 0.6% in April.
Over the last 12 months, the all items index increased 4.2% before seasonal adjustment. It was the third consecutive year-over-year increase since the start of the Iran war in late February.
Sam Huszczo, a chartered financial analyst in Southfield, agreed that there’s no real long-term empirical evidence that cements cryptocurrency as an inflation hedge.
“A lot of people accept these narratives about bitcoin without checking the facts,” Huszczo said.
“Anyone who pitches me this theory I would just ask, show me the evidence,” he said.
The narrative feeds on the notion of a fixed supply of digital tokens. And he said it did hold up well in the most recent inflation shock a few years ago, the biggest inflation surge in the last 40 years, similar to gold.
“But one instance isn’t proof that it is this holy grail inflation hedge. A broken clock can be right as well,” Huszczo said.
Robert Bilkie, CEO of Sigma Investment Counselors in Northville, told me zero evidence exists to suggest that cryptocurrencies would be a good inflation hedge.
“There is not sufficient data to indicate what the correlations would be to inflation or, for that matter, any other asset class,” Bilkie told the Detroit Free Press. He sees owning common stock and real estate as better inflation hedges today.
Detroit’s ‘Bitcoin Butcher’ still believes in the inflation-hedge theory
Yet Detroit’s “Bitcoin Butcher” — the moniker used by Ronnie Bedway on social media platforms — said Bitcoin alone serves as a hedge against future monetary inflation due to its fixed supply. We’re talking about when more money is chasing the same amount of goods. Or money is being created at a faster rate than the ability to produce goods.
“Critics will point to the recent price action and decline from its high of over $120,000 last year to just over $60,000 right now and say Bitcoin is failing,” Bedway told the Detroit Free Press.
But Bedway argued that inflation now is resulting from a supply shock — higher oil prices after the Iran war began in late February. Currently, Bedway said higher oil prices and the impact on prices for other goods put pressure on the Federal Reserve to maintain higher interest rates to prevent inflation from getting out of hand.
“This restrictive monetary policy takes liquidity out of financial markets and results in riskier assets, such as bitcoin, getting hit harder in the short term,” Bedway said.
He still sees bitcoin as a longer-term inflation hedge when oil prices come back down and the Federal Reserve loosens monetary policy in the future.
Bedway is a third-generation owner of Ronnie’s Meats in Eastern Market in Detroit. Here’s a good Detroit trivia night point: Ronnie’s made a name 50 years ago during the “Corned Beef War” with Wigleys in Eastern Market. Tens of thousands of pounds of brisket were sold at deep discounts in the friendly battle in 1975.
The worries about inflation now, Bedway said, are being driven primarily by anticipated ripple effects of higher oil prices earlier this year. A higher cost for oil flows everywhere, including the meat industry. And some argue that we’re still going to see price hikes ripple through the economy in months ahead even after oil prices fell somewhat in recent weeks.
“Our meat gets shipped on trailers that need oil to run,” he said. “So to the extent that oil prices are higher, it’s a tax on the whole economy as producers need to charge higher prices to recoup the higher oil prices.”
All other cryptocurrencies are irrelevant to the idea of an inflation hedge, Bedway said, with the exception of possibly Ethereum.
Less risky inflation hedge bets
Of course, other experts maintained that other less speculative options exist as an inflation hedge.
One less volatile option for some savings: inflation-indexed U.S. savings bonds bought online at TreasuryDirect.gov. I Bonds can be used as part emergency savings, part conservative holdings for investors who want to guard some of their portfolio from dramatic downturns in the stock market.
The “I” in I Bonds stands for inflation. The composite interest rate on I Bonds can go up or down every six months after you bought the bond, based on the shift in inflation. Newly bought I Bonds issued May 1 through Oct. 31 have a six-month composite rate of 4.26%.
Bitcoin’s wild ride since October 2025 proves that the risk of watching a ton of money go up in smoke quickly remains when investing in cryptocurrency.
If the idea of an inflation hedge is to protect your purchasing power in good times and bad, well, I’m not buying the crypto-inflation narrative just yet, either.
Contact personal finance columnist Susan Tompor: stompor@freepress.com. Follow her on X @tompor.
This article originally appeared on Detroit Free Press: Inflation run-up doesn’t mean you should run toward cryptocurrency
Reporting by Susan Tompor, Detroit Free Press / Detroit Free Press
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By Susan Tompor, Detroit Free Press | USA TODAY Network
