According to reports, NYDIG's global head of research, Greg Cipolaro, released a study on Friday asserting that Bitcoin is not a robust inflation hedge. The data examined does not substantiate the widely held belief that Bitcoin offers protection against inflation. Cipolaro observed that the correlations between Bitcoin and various inflation measures are neither consistent nor particularly significant. Instead, Bitcoin tends to appreciate when the U.S. dollar weakens, rather than in response to increases in inflation.
The NYDIG research analyzed Bitcoin's price behavior in relation to several macroeconomic indicators. Cipolaro determined that inflation expectations serve as a more predictive indicator for Bitcoin's price movements than actual inflation data. However, even inflation expectations exhibit a relatively weak correlation with Bitcoin's price fluctuations. This report presents a notable contrast to the long-standing narrative promoted by Bitcoin proponents, who often describe the asset as "digital gold."
Cipolaro identified interest rates and money supply as the two primary macroeconomic factors influencing Bitcoin. The relationship between global monetary policy and Bitcoin has consistently been positive and strong over time. Generally, looser monetary policies tend to benefit Bitcoin's price performance.
Significance of the Findings
The NYDIG findings directly challenge a fundamental investment thesis used to justify including Bitcoin in investment portfolios. A considerable number of institutional investors and retail buyers acquired Bitcoin specifically as a safeguard against currency debasement and escalating consumer prices. The research indicates that this strategy might be fundamentally flawed.
Reports suggest that correlation coefficients between Bitcoin and the U.S. Dollar Index have ranged between negative 0.3 and negative 0.6 from 2020 to 2025. This inverse relationship implies that Bitcoin typically rises when the dollar falls against other major currencies. Certain Bitcoin-specific factors, such as the 2024 halving event and the approval of Exchange Traded Funds (ETFs), can occasionally override dollar influences in the short term.
Institutional adoption of Bitcoin saw accelerated growth in 2025, with ETFs accumulating over $65 billion in assets by April. BlackRock's iShares Bitcoin Trust alone attracted more than $18 billion. These institutional investors require accurate frameworks for understanding Bitcoin's price drivers to justify continued capital allocation.
Implications for the Industry
The NYDIG research redefines Bitcoin's role within the global financial system. Cipolaro posits that Bitcoin has evolved into a liquidity barometer rather than an asset for inflation protection. This characterization aligns Bitcoin more closely with risk assets that react to central bank policies and credit conditions.
Gold also demonstrates inconsistent performance as an inflation hedge, according to the NYDIG analysis. The research found that gold exhibits an inverse correlation with inflation across different time periods. Both Bitcoin and gold display stronger relationships with dollar movements and interest rate changes than with inflation itself.
The findings suggest that Bitcoin's integration into traditional financial markets will likely strengthen its inverse correlation with the dollar over time. NYDIG anticipates this relationship to grow as Bitcoin becomes more deeply embedded in the global financial ecosystem. This development could potentially diminish Bitcoin's utility for investors seeking assets uncorrelated with traditional markets.
The analysis has direct implications for portfolio construction strategies. Asset allocators who have incorporated Bitcoin as an inflation hedge may need to reassess their position sizing and risk management approaches. The research indicates that Bitcoin functions more effectively as a speculative play on loose monetary policy and dollar weakness rather than as a defense against rising consumer prices.