Bitcoin’s inflation hedge has a hidden cost, and leverage makes it worse

Borrowing costs, missed interest income, and futures fees can all eat into returns even when Bitcoin holds its value. That's a big problem, and it gets even worse when inflation stays high.September's US inflation report showed consumer prices up 3.7% year over year, fueling concerns about the dollar's purchasing power. That same inflation pressure keeps interest rates high, making it more expensive to borrow money to buy Bitcoin and hold it while waiting for it to rise.Bitcoin reacted immediately to the inflation report, but the bigger question now is what happens next. Two people or companies can buy Bitcoin at the same price, hold it for the same period, and walk away with very different returns, all because they financed their purchases differently.One Bitcoin bet, three different billsSomeone who buys $10,000 of Bitcoin with cash has no interest payments to make while holding it. The coins can rise or fall in price without a lender demanding repayment.The Federal Reserve's interest-rate release showed a 4.26% three-month Treasury constant-maturity yield for Oct. 13, the day before the CPI report. While that's an annualized market benchmark, it still illustrates what we call op...