Thursday, March 28, 2024
10.6 C
London

HomeCrypto AnalysisIs Soaring US Inflation Rate Hurting Bitcoin's Revival Chances?

Is Soaring US Inflation Rate Hurting Bitcoin’s Revival Chances?

It is very much likely that the digital currency ecosystem will continue to experience many headwinds as a result of the fallout in the global market for the rest of the year.

However, policymakers have two case scenarios when it comes to crypto’s response to the Fed action with respect to the soaring inflation.

One of the two that can back the long-term bullish thesis of Bitcoin and altcoin growth which economic drivers will continue to raise interest rates, a move that has the goal of tapering inflation but which can also plunge the economy into recession.

While the recession is the worst-case scenario for stakeholders in traditional finance, it may well mean the beginning of a probable bull season for cryptocurrencies. Should the economy be plunged into recession, the government will man up and inject liquidity to prop up businesses.

This cash injection will be a bullish case for cryptos as it will likely water down the value and purchasing power of the Dollar which will push many investors to safeguard their assets in Bitcoin, an asset whose scarcity will make it more seen as a hedge against inflation.

While these are potential events that can unfold in the economy and the crypto industry in the near to long term, certainty, especially in the aspect of timing cannot be given.

SOURCE

DISCLAIMER

As per the principles outlined by the Trust Project, Cryptozia remains dedicated to delivering impartial and transparent reporting. This news article is intended to offer precise and punctual information. Nevertheless, it is recommended that readers autonomously corroborate the facts and seek advice from a qualified expert prior to making any decisions reliant on this content.

latest articles

explore more