Because some portion of cost of living will expand with it..housing prices, other financial assets and therefore wealth of those investing in them, and in the future, costs of commodities and other consumption items as investors drain the stored energy in these "liquidity capacitors" and the money flows into the real economy.

"mitigate the potential negative effects of" I guess..

>How is it a hedge if it moves in line with liquidity?

I don't know what you're asking? Liquidity expansion inflates assets, and BTC inflates more than almost anything, especially over a multi-year time frame.

It hedges just holding cash. It hedges the opportunity cost of not investing while invest-able assets are going up in value, and wages on a relative basis are not.

>Why is expansion of liquidity is something one would need to hedge against?

Sort of a philosophical question lol. Maybe you don't. If one wants to invest at all (why though?) this is a framework for thinking about that process.

A hedge is meant to control risk by taking an offsetting position. Whatever you're describing is most definitely not a hedge.

>BTC inflates more than almost anything

What the everloving fuck are you talking about? Bitcoin is deflationary to the point that nearly everyone uses it as an "investment" vehicle, not to actually transfer money. Do you even know what inflation is?

Its price inflates. Prior to 2021 when people talk of the Federal reserve keeping rates low, general price inflation was low, but there was "inflation" in asset prices. This is what I'm referring to. Monetary inflation existed and it flowed into financial assets.

You can't expect to make sense of a complex phenomenon without having a proper conceptual framework and terminology.

It sounds like you have those, so let's hear it...