Is inflation good for crypto

Bitcoin was supposed to hedge against inflation—here's why it hasn't worked that way

Cryptocurrency inflation

And when investors sell, they don’t just sell in one asset class. Retail investors and institutional investors might sell assets to cover for losses in other ones. If crypto was once a hedge from inflation and traditional market forces, that era may be long gone. “There was a time when you could think about Bitcoin as a way to diversify from the market” but that’s no longer the case, said Merav Ozair, a blockchain expert and fintech professor at Rutgers Business School. “When people panic, they panic cross-border.” Economics "Many Venezuelans are using Bitcoin to convert their bolivars, which are being permanently devalued by hyperinflation, to keep something of value," says economist Asdrubal Oliveros of Caracas-based consultancy Econanalitica.

The market cap of Bitcoin, the world's largest cryptocurrency, was around $578 billion. Bitcoin's dominance is currently 48.93%, an increase of 0.12% over the day, according to CoinMarketCap.

Cryptocurrency and inflation

There is always the possibility of hyperinflation when a country prints its own currency. However, most developed countries have experienced only moderate bouts of inflation. In fact, having some consistent, low level of inflation is seen as a positive driver of economic growth and investment, as it encourages people to put their money to work rather than have it sit idle and lose purchasing power over time. Investments and Inflation "Although inflation in itself could be an argument for growth in crypto assets, with inflation comes other aspects like risk off appetite from investors fearing a recession, and avoiding what bitcoin is deemed to be, riskier assets," said Sylvia Jablonski, chief investment officer at Defiance ETFs.