Few assets stir up as much conviction—and controversy—as Bitcoin. But calling it a hedge against inflation in 2025 is more complicated than it sounds. Between its fixed supply, surging institutional demand, and sky-high volatility, Bitcoin looks less like gold (CM:XAUUSD) and more like a high-risk insurance policy.
Bitcoin’s Supply Caps Create Scarcity
At the core of Bitcoin’s inflation narrative is its hard cap of 21 million coins. There’s no central bank printing more. That scarcity, especially paired with halving events like the one in April, is designed to slow supply even more over time.
But scarcity alone doesn’t make an asset a hedge. It’s the relationship between supply, demand, and economic stress that counts. When inflation fears spike and fiat weakens, demand for alternative stores of value can rise—amplifying Bitcoin’s price.
Big Players Are Piling Into Bitcoin
In 2025, Bitcoin has seen some serious institutional buy-in. Strategy (formerly MicroStrategy) (MSTR) now holds over 538,000 BTC—nearly $47 billion worth. Metaplanet (JP:3350) is close behind, aiming to hit 21,000 BTC by 2026. Even the State of Wisconsin’s pension fund put $160 million into spot Bitcoin ETFs.
ETFs themselves are exploding. U.S. inflows are projected to hit $3 billion this quarter, and BlackRock now includes Bitcoin in its model portfolios.
But Bitcoin Comes with Big Risk
For all the optimism, Bitcoin is volatile—painfully so. It jumped above $109,000 in March, only to plunge below $75,000 weeks later. As of now, it’s around $88,000. That’s not the kind of stability most investors want during inflation scares.
Then there’s the centralization issue. Just five mining pools control two-thirds of the network. And a tiny handful of wallets hold nearly all circulating BTC.
So, Is BTC a Hedge?
Sort of. Bitcoin has the ingredients: scarcity, portability, and global access. But it’s still a volatile bet. It’s less like gold and more like holding Tesla stock in the middle of a currency crisis. If inflation gets ugly, Bitcoin might soar—or sink. It’s not a hedge. It’s a gamble with upside.
At the time of writing, Bitcoin is sitting at $94,739.
