Bitcoin Defies Inflation Logic as Institutional Investors Flock to Cryptocurrency

The recent surge in Bitcoin's price above $81,000 has raised questions about its role as a hedge against inflation. Traditionally, rising inflation would lead to declining Bitcoin value due to the Federal Reserve's interest rate hikes making safe-haven assets more attractive.

However, this time around, the data suggests that institutional investors are increasingly viewing Bitcoin as a store of value and inflation hedge rather than a speculative asset.

The influx of $4.45 billion into US-listed Bitcoin ETFs since March has been driven by directional bets rather than arbitrage trades, according to analysts at Bitget Research and Wincent.