Question 1

What is the difference between Bitcoin and inflation?

Accepted Answer

Inflation is the gradual loss of purchasing power in fiat currencies caused by central banks increasing the money supply. Bitcoin is a fixed-supply asset with a hard cap of 21 million coins that cannot be altered by any government or institution. While fiat currencies lose value over time through inflation, Bitcoin's supply scarcity creates the opposite dynamic: as demand grows against a fixed supply, its purchasing power has historically increased over multi-year periods.

Question 2

How has Bitcoin performed against the US dollar over 10 years?

Accepted Answer

Over the 10-year period from 2015 to 2025, Bitcoin appreciated from approximately $200 to over $90,000, representing a gain of more than 45,000%. Over the same period, the US dollar lost roughly 30% of its purchasing power as measured by the Consumer Price Index. No traditional asset class matched Bitcoin's appreciation rate over this window, though it experienced multiple drawdowns of 50-80% along the way.

Question 3

Why does inflation erode nonprofit purchasing power?

Accepted Answer

Nonprofits typically hold operating reserves in cash or low-yield instruments like money market accounts. When inflation runs at 4-8%, a $1 million reserve loses $40,000-$80,000 in real purchasing power annually without any spending. Over a 5-year period at 6% inflation, the reserve loses roughly 26% of its real value. This is a structural risk that most nonprofit boards underestimate because the nominal dollar amount stays constant while actual buying power declines.

Question 4

Is Bitcoin a better inflation hedge than gold?

Accepted Answer

Bitcoin and gold both serve as inflation hedges due to supply scarcity, but they differ in key ways. Gold has a 5,000-year track record and lower volatility. Bitcoin has a mathematically enforced supply cap (gold's supply can increase with new mining), is digitally transferable without intermediaries, and has outperformed gold significantly over every 4-year period since 2013. For nonprofits, Bitcoin offers higher upside but requires more governance infrastructure. Gold is more conservative. Many treasury strategies hold both.

Question 5

How does Federal Reserve money printing affect nonprofits?

Accepted Answer

When the Federal Reserve expands the money supply through quantitative easing or low interest rate policy, the purchasing power of every existing dollar decreases. Nonprofits holding large cash reserves are directly harmed: their reserves buy less over time. Additionally, inflation increases the cost of programs, staff salaries, and operations, squeezing the real value of existing funding. Nonprofits that hold hard assets like Bitcoin or real estate partially insulate themselves from this dynamic.

Question 6

What is the Bitcoin halving and how does it affect supply?

Accepted Answer

The Bitcoin halving is a programmatic event that occurs approximately every four years (every 210,000 blocks) that cuts the rate of new Bitcoin issuance in half. The most recent halving in April 2024 reduced the block reward from 6.25 BTC to 3.125 BTC per block. Halvings reduce the rate at which new supply enters circulation, creating a supply shock when demand remains constant or grows. Historically, each halving has preceded a significant price appreciation cycle within 12-18 months.

Question 7

Can a nonprofit protect its reserves from inflation using Bitcoin?

Accepted Answer

Yes, and several nonprofits have done exactly this. Rainforest Foundation US publicly targets 100 BTC in long-term reserves specifically as an inflation hedge and store of value. My First Bitcoin holds 100% of its reserves in BTC. The strategy involves allocating a portion of reserves to Bitcoin (typically 5-20% for risk-managed approaches), establishing proper custody infrastructure, and maintaining a long holding horizon of 4+ years to smooth out volatility.

Question 8

What is the CPI and why does it understate real inflation?

Accepted Answer

The Consumer Price Index (CPI) is the US government's primary measure of inflation, tracking a basket of goods and services. Critics argue it understates real inflation because the basket composition has changed over time to substitute cheaper goods when prices rise, it excludes asset price inflation (housing, stocks), and it uses hedonic adjustments that reduce measured inflation when product quality improves. Alternative measures like the Chapwood Index or MIT Billion Prices Project consistently show higher inflation rates than official CPI figures.

Question 9

How does Bitcoin's fixed supply create deflationary pressure?

Accepted Answer

Bitcoin's protocol enforces a hard cap of 21 million coins. Approximately 19.8 million have already been mined, with the remaining supply being issued at a decreasing rate until approximately 2140. Additionally, an estimated 3-4 million BTC are permanently lost due to lost keys or forgotten wallets, reducing the effective circulating supply further. As demand grows from institutional adoption, ETF inflows, and sovereign accumulation against this fixed and shrinking supply, deflationary pressure on Bitcoin's price in fiat terms increases.

Question 10

What percentage of nonprofit reserves should be in Bitcoin as an inflation hedge?

Accepted Answer

There is no universal answer, but common frameworks suggest: 1-5% for conservative boards new to Bitcoin, treating it as a speculative allocation; 5-15% for organizations with a longer time horizon and higher risk tolerance; 20%+ for mission-aligned organizations like My First Bitcoin that view Bitcoin as central to their work. The key variables are operational cash needs (never put short-term operating funds in BTC), board governance capacity, holding period, and mission alignment with the Bitcoin ecosystem.

Asset	2015 Value	2025 Value	Change
USD Cash	$100,000	$74,000	-26%
Money Market (2% avg)	$100,000	$121,900	+22%
S&P 500 Index	$100,000	$287,000	+187%
Bitcoin	$100,000	$28,400,000	+28,300%

BITCOIN VS
INFLATION

US CPI INFLATION (ANNUAL)

BITCOIN PRICE CHANGE (ANNUAL)

ASSET PRICE INFLATION

BITCOIN VS CPI

BITCOIN VS ASSETS

HISTORICAL
PERFORMANCE

BITCOIN

CPI INFLATION

BITCOIN
ADOPTION TIMELINE

Bitcoin Genesis Block

First Real-World Transaction

Bitcoin Reaches $1,000

Bitcoin Hits $19,783

Third Bitcoin Halving

MicroStrategy Treasury Adoption

Tesla $1.5B Bitcoin Purchase

Bitcoin All-Time High

HRF Bitcoin Development Fund

Bitcoin Spot ETF Approval

Bitcoin Surpasses $73,000

Rainforest Foundation US Treasury Launch

My First Bitcoin 100% BTC Operations

Bitcoin All-Time High $126,000

Bitcoin Nonprofit Directory Launch

PURCHASING POWER
COMPARISON

WHY NONPROFITS HOLD BITCOIN

FREQUENTLY ASKED QUESTIONS