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Warren on crypto, I think this is fuel for crypto

Sen. Elizabeth Warren told CNBC on Wednesday she's skeptical that bitcoin will prove to be a reliable hedge against inflation over the long run, a key reason some investors choose to own it.

"People can make their own investment decisions, but to do that somehow assumes two things. One is that what's happening with bitcoin or any other cryptocurrency is somehow going to be divorced from what's happening elsewhere in the economy," the Massachusetts Democrat, a frequent Wall Street and crypto critic, said on "Squawk Box."

The second assumption, according to Warren, is "crypto coins are not going to have their own inflationary pressures." She countered such a notion, saying inflation "may come from a different source than what happens with dollars, but look at what's happened in the high volatility in the price of these things."

"The idea that they're somehow a protection or a hedge, I don't think that's going to be borne out over time," she added.

Many crypto bulls believe bitcoin represents a durable, long-term store of value, providing protection against what they see as too much government fiscal spending on top ultra-accommodative monetary policies by global central banks causing problematically high inflation. Their reasoning is that eventual supply of bitcoin is capped at 21 million tokens. Currently, the world's largest cryptocurrency by market value has 18.77 million tokens in circulation.

New bitcoins come into the market when so-called miners use high-powered computers to verify transactions across the blockchain, a decentralized digital ledger. That reward is systematically reduced roughly every four years in a technical event known as the "halving." The most recent occurred in May 2020.

Many critics, Warren among them, point to bitcoin's penchant for wild price swings and believe it undercuts the premise of bitcoin as a store of value.

In recent months, inflation concerns have permeated across the...

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