Introduction
Inflation is the rise in prices of goods and services in an economy. In recent years, US inflation has significantly impacted global financial markets, including the cryptocurrency market.
Current situation
Since the beginning of the COVID-19 pandemic, the US economy has been experiencing instability. Stimulus measures and supply chain disruptions have led to a significant rise in inflation. In 2024, it reached record levels in recent decades.
The impact of inflation on the cryptocurrency market
1. Declining confidence in fiat currencies: High inflation reduces the purchasing power of the dollar, forcing investors to look for alternative assets such as cryptocurrencies.
2. Inflation Protection: Cryptocurrencies such as $BTC are often seen as a means of preserving capital. Bitcoin's limited supply makes it less susceptible to inflation.
3. Increasing interest from institutional investors: In an inflationary environment, large investors are investing in cryptocurrencies, increasing demand and prices.
4. Low Interest Rates: The Fed may cut rates in response to inflation, making traditional investments less attractive. Investors are turning to riskier assets, including cryptocurrencies.
Examples and risks
In 2021 and 2022, amid rising inflation, the cryptocurrency market has grown significantly. However, high volatility and regulatory risks remain important factors to consider.
Conclusion
Inflation in the United States has a significant impact on the cryptocurrency market, making them attractive to investors in times of economic uncertainty. However, it is important to consider all risks before investing in these assets.
