As U.S. Inflation Rises, Bitcoin Offers A Hedge


The below is from a recent edition of the Deep Dive, Bitcoin Magazine’s premium markets newsletter. To be among the first to receive these insights and other on-chain bitcoin market analysis straight to your inbox, subscribe now.

As many already know, the United States Consumer Price Index for October was announced yesterday morning coming in at a red hot 6.2% year-over-year growth, continuing its accelerating trend since May 2020. This is now the fifth month in a row with CPI gains over 5%. 

Source: FRED 

Let’s dig into the owner’s equivalent rent, which rose to 3.1% and makes up nearly 24% of the CPI calculation this month. It has been a significant factor driving the CPI increase since May this year. That said, there are many critiques about how owners’ equivalent rent is calculated. When looking at other, more robust data sources for calculating rent increases, it’s clear that owner’s equivalent rent vastly underestimates the current levels of rent inflation.

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