You've had a big move in Bitcoin over the last month or so, had a big move over the last several years after you rethought the way you think about what's happening here? Not really. I mean, people talk about Bitcoin being a cryptocurrency like the other ones, but they're not really currencies.
They're not a unit of account. They're not a scalable means of payment. They're not a stable store of value.
Not a single numerator. Bitcoin in the past went to 17 down, then to 16 and has about 100 because of another 50% correction. So it's a speculative asset like Meme stocks or SPACs and others highly volatile.
Many people are going to it, but don't take El Salvador. They force everyone's use Bitcoin as legal tender and less than 1% of all transactions are occurring in Bitcoin. So I don't think is going to ever become a currency that's going to be a speculative asset.
One thing the dollar is depreciated against is Bitcoin, and I think this is where I would see some separation between what's happening with many kinds of main stocks and what is happening with Bitcoin. This seems to be a preference. There are market participants who believe that this is a place to be.
If you're worried about the depreciation of the US dollar and a fiscal trajectory of the United States of America. Do you see a case for it there? Not really, because actually when the Fed was essentially raising rates and inflation was higher, Bitcoin was falling like in 2012 as there was a stock market correction and other stocks are going higher and the Fed is easing and inflation has fallen.
Bitcoin is going higher again. So historically has not been a hedge against inflation. Actually, it looks like it's highly correlated positive with stocks and better relative to the equity market.
So it's not a traditional like hedge like gold that these are in periods of time or inflation rising or debasement or what is about the dollarization. So is something to me looks like speculative asset is highly correlated with equities. So it's not a hedge against inflation.
You see sort of parallel tracks to meme stocks and some of the other euphoria that we've seen. At the same time, there seems to be something more concrete behind this. You mentioned gold and we are seeing that rally in gold in tandem because of what John is talking about, that store of value outside of the US dollar to protect against some sort of loss of fiscal dominance.
Do you see with a more institutionalized structure endorsed by a presidential administration there being a case for at least a crypto based store of value that could offset some of the risks of volatility in the dollar or the potential loss on the margins of fiscal dominance down the road. I'm not sure because if you're worried about inflation, the basement of fiat currency, or even the dollarization, there are plenty of other assets that provide a good hedge, a short term Treasuries tape. So I'll add commodities, gold, precious metals.
So it's not as if there is not other alternatives. And as I pointed out in the last few years when inflation was higher, actually Bitcoin was falling. And when inflation has fallen, Bitcoin is going higher.
So it doesn't look like it's been actually negatively correlated with inflation. So it is a speculative asset for some people is a store of value. But if you want to hedge yourself against inflation, I think that a spectrum of variety of other assets that are backed actually by real income or something store of value that are a better hedge against some of the risks that people are worried about.
But given the change of tone in Washington, do you think there could be retail adoption at any point? Oh, yeah, and there's already been retail adoption. But my worry is actually that the regulation on crypto might become looser like they were before.
And the idea of another speculative run, you have another set of scams like SPF and so on, and then you get another bust. So the risk is we are going to go towards a very little regulation. We know there are lots of players in this space that are quite shady and the lack of regulation actually leads to a bigger bubble and a bigger based underlying.
