Chicago Stock Exchange Chief Economist: "Bitcoin competes with gold as a hedge against inflation."

The Chicago Mercantile Exchange's chief economist and managing director, Blufford Putnam, recently acknowledged that Bitcoin is competing with gold as a hedge against inflation.

Putnam explained: It appears that gold has competition emerging from Bitcoin, he told Bloomberg in a video posted on YouTube the day before yesterday.

he stated that given the current gold price range, increased production would likely be a feature of 2021.

The gold display is less clear than the supply of Bitcoin, as Bitcoin announces a specific maximum of 21 million coins, distributed in trading according to a fixed mining schedule, which is built in In the code of the parent.

Putnam mentioned this characteristic of Bitcoin in his logic, although he also pointed to the volatile nature of the currency, explaining please be aware, steady supply does not mean less volatility.

He said, "In fact it can mean the opposite," adding: When width is relatively inflexible, the dynamics of changing patterns with demand can have very large and surprising effects On the price. Bitcoin has made this point.

The store of value or hedging is often a place to place value on a long-term basis as a potential hedge against inflation and shifts in global economic factors. And lack of relevance could be a major aspect of safe haven assets, Investopedia points out.

"We have also noticed that gold may lose its appeal as a hedge against global political risks," Putnam said.

He added: From 2017 to 2020, occasional highs and lows in gold prices appear to be directly related to Fed policy more than anything else.

He continued by saying: Because stocks were responding to the same momentum, the relationship between gold and stocks tended to become slightly more correlated, weakening gold's appeal as a safe haven. / p>

both gold and Bitcoin broke their previous all-time highs in 2020. Gold hit a record high in July, surpassing $ 2,000 an ounce in August, according to Trading View data. Bitcoin, meanwhile, broke its highest level in December, and doubled from there in the following weeks.