Fred Krueger: ‘Bitcoin offers superior hedge against inflation,’ here’s why

• Inflation outpaces wages as costs soar 10-20x, pushing Bitcoin as a wealth-preservation tool.
• Fred Krueger sees Bitcoin’s limited supply and decentralized nature as ideal for combating inflation.

Fred Krueger, an entrepreneur and Bitcoin advocate, shared his perspective on inflation and rising living costs on the 30th of December, through posts on X (formerly Twitter). 

Krueger examined how inflation has reduced purchasing power over the past five decades and proposed Bitcoin [BTC] as a potential solution for long-term wealth preservation.

Rising costs far outpace wages

Krueger highlighted that the cost of essential goods and services has increased dramatically since 1971. He noted that a gallon of gas went from $0.36 to $3.00, and a slice of New York pizza rose from $0.25 to $5.00. 

Education costs, such as tuition at Stanford University, saw one of the sharpest increases, growing from $2,400 per year to $66,000—a 26-fold rise.

Meanwhile, wage growth has not kept up. The federal minimum wage increased from $1.60 to $7.25, just a fourfold rise. Salaries in professions like engineering, law, and aviation have grown by seven to nine times. 

Krueger observed that investment banking was one of the few fields with substantial growth, where starting salaries have risen 15-fold.

However, he emphasized that even this falls short of the 10-20x increases seen in living expenses.

The uneven burden of inflation

Krueger stated that rising costs have placed a heavier burden on the bottom 50% of earners, who struggle to keep pace with growing expenses.

He explained that while the top 1% of earners have benefited significantly from rising asset prices, the majority have been left behind. 

Krueger noted that this trend is not unique to the United States, pointing out that Europe faces similar issues, with slower wage growth and comparable cost increases.

Krueger also rejected claims that inflation-adjusted numbers or better product quality explain the sharp increase in prices.

He pointed out that products like Ford F150 trucks and Porsche 911s, which he has owned, have not fundamentally changed despite their higher costs.

Bitcoin as a financial hedge

Krueger proposed Bitcoin as a potential solution to combat inflation and preserve purchasing power.

He compared Bitcoin to traditional inflation hedges like gold and the S&P 500, which have both shown strong gains over the past five decades.

Gold’s value rose from $35 per ounce to $2,600, while the S&P 500 grew from $100 to $6,000.

However, Krueger expressed confidence in Bitcoin’s future performance. He pointed to its decentralized nature and limited supply as advantages over traditional assets, stating,

“Bitcoin offers a superior hedge against inflation.” 

A new era of wealth preservation

Krueger acknowledged gold’s long-standing role as a store of value across centuries, but he positioned Bitcoin as a modern alternative. 

While Bitcoin’s history is relatively short—it was introduced in 2009—he argued that its characteristics make it well-suited to address the challenges posed by inflation in today’s economy.