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.