Question #74 ·
Why do some investors consider Bitcoin a hedge against inflation and national debt?
- Because Bitcoin network fees are tax deductible which helps investors manage inflation and reduce debt
- Investors view Bitcoin as limited supply asset protecting value against fiat inflation and national debt Right answer
- Because Bitcoin price movements mirror gold at 2,000 USD per ounce regardless of factors
- Because Bitcoin yields regular interest payments that offset inflation costs and reduce government debt burdens
Why is this the correct answer?
This is correct because Bitcoin has a fixed maximum supply of 21 million coins. Unlike fiat currencies, which can be printed in unlimited amounts by governments and devalued by inflation, Bitcoin’s scarcity prevents dilution. Beginners should know that when national debt rises and central banks issue more currency, the purchasing power of money can drop. Bitcoin’s capped supply offers a hedge against that risk.