Record high inflation is causing investors to take a closer look at Bitcoin

Consumers in the United States and around the world continue to feel inflationary pressures, and recent data shows that consumer price index (CPI) rose 6.2% year-over-year in October, a development that further casts doubt on the “transitory” Inflation pops up narrative that comes from the Federal Reserve.

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As a result of the high pressure, traditional financial markets were hit on November 10 as fears of rising inflation and a loss of purchasing power weighed on investors’ minds, suggesting that Major pulled back from the new record highs earlier this week were set up.

This is in contrast to the price action in the crypto market, where explosive upward momentum has resulted in Bitcoin (BTC) price rising 4.7% once CPI data is released.

The rapid rise in inflation in 2021 has led to increasing demands on the Fed to end its expansionary policies and raise interest rates. Many argue that the central bank has cornered itself and has no easy options for the future, as interest rate hikes could make paying off US national debt even more difficult.

According to recent statements by former US Treasury Secretary Larry Summers:

“Global financial markets seem to expect slower growth and low real interest rates over the next few years, which will undermine the ability of central banks to lead economies.”

With interest rate controls being the Fed’s primary tool for influencing markets, there doesn’t seem to be much other than the central bank to keep printing money to meet the challenges.

Not good for fiat, good for crypto

With the falling value of fiat currencies like the dollar, cryptocurrency holders are uniquely positioned to benefit from, or at least receive some protection from, these latest developments. la highlighted the power of bitcoin and other altcoins as a hedge against currency devaluation and inflation.

According to data from Bitcoin Stimulus, Americans who deposit $ 1,200 stimulus checks in BTC as of April 2020 will now have $ 12,172 worth of BTC. This corresponds to an increase of 914%.

And those gains aren’t limited to the leading cryptocurrency, as the entire market has seen a cash inflow that has increased total market cap from $ 190 billion to $ 2.95 trillion in the past year.

In addition to increasing the value of a large number of tokens on the market, crypto holders have also been rewarded with many crypto-stim tests in the form of airdrops, as most recently by Ethereum.Name Service, which has a five-digit. generates salary day for early adopters of the protocol.

Overall, crypto market participants have benefited from the protection offered by holding assets that increase in value as the purchasing power of fiat currencies deteriorates, a process that shows no signs of slowing. will slow down in the near future if inflation continues to rise.

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