Bitcoin Was 'Terrible Inflation Hedge,' Fed's Neel Kashkari Says: 'Has Anyone Bought Anything With It?'

Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, recently questioned Bitcoin's (CRYPTO: BTC) utility and viability.

The digital asset, he says, lacks real-world use.

"Has anybody... ever bought something using Bitcoin as a currency? A sandwich? A computer? A book? Anything?" Kashkari asked.

Kashkari then addressed how Bitcoin enthusiasts cite the asset's effectiveness as an inflation hedge, a claim that has been put to the test in recent times.

"When we had this big inflation spike, I thought, 'We're going to make these Bitcoin guys feel like they were right.' But then it turned out Bitcoin was a terrible inflation hedge," he said.

Drawing parallels to speculative investments like Beanie Babies or Pez dispensers, Kashkari criticized the promotion of Bitcoin as something more substantial than it is, potentially misleading Americans into making poor investment choices.

He shared a personal anecdote to illustrate his point, recounting a conversation with a customs officer whose friend considered taking out a home equity loan to invest in Bitcoin — a decision Kashkari strongly advised against.

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Troy Cross, a fellow at the Bitcoin Policy Institute, responded to Kashkari's comments on social media, challenging the assertion that Bitcoin lacks real-world utility.

Cross claims that he used Bitcoin to buy a variety of goods and services, including alpaca socks. See video below.

Not sure why, but I get honest vibes from Kashkari. I think he means well.

So either my vibes are off (which is very possible) or we have a lot of educating to do.

Also... Neel, I regrettably have bought many many things with bitcoin: alpaca socks, jam, hotels and flights,… https://t.co/MG5zhaVZB6

— Troy Cross (@thetrocro) February 7, 2024

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Image: Pixabay