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Bitcoin is a hedge against fiat and the fractional reserve banking system.

• matt4077 9y ago
  It doesn't make sense for institutional investors to hedge against "fiat". Because the failure of the current financial system would be catastrophic event for any such investor, at which point his hedging wouldn't help. I. e. the exchange where these futures are traded would no longer be operational. There's a name for this effect which I've forgotten. But it can be seen, for example, in the markets ignoring the risk of nuclear war during the Cuban Missile Crisis. The reason is the same: there's no use in considering nuclear war in your decision-making, because you'd be dead anyway.
  • Fomite 9y ago
    This. If "fiat" collapses that's a catastrophe far beyond the level of "No worries, I have some bitcoin futures in an exchange." It's like saying bitcoin is a hedge against the end of the world.
  • 627467 9y ago
    couldn't this be a hedge against ANY (but not all) failure of some financial system somewhere?