In the United States, economic inflation continues to have negative effects. However, in parallel with this situation, strange as it may seem, bitcoin (BTC) remains stable. In an effort to prevent the situation from continuing and the U.S. dollar from further losing value or devaluing over time, the Federal Reserve (FED) has attempted to tighten monetary conditions.
The reason for inflation is known
Inflation in the United States has reached remarkable proportions. The inflation rate in the US is now 7.91%, which is very high. Meanwhile, BTC continues to trade between $38,000 and $41,000. What explains this situation? For the experts, it is the unwise decisions of the government that are responsible for the melting pot that is slowly being created between BTC and the dollar.
For the professionals, the monetary policy to help people and businesses through the quarantines ended up creating many other problems in the economy. But it’s not just the traditional currency that is affected by the current situation. Other sectors are also suffering. For example, there is the energy sector, especially since there is a war going on between Ukraine and Russia. This war has also had a strong impact on the price of gas and energy.
Inflation that could decrease over time
While inflation with the U.S. dollar is around 7.1%, BTC inflation remains in the 1.75% range per year. For those who are passionate about this cryptocurrency, inflation will be even lower soon, as the total supply of BTC (21 million) may be reached soon. This is different from fiat currencies such as the U.S. dollar, which can be printed according to the needs of politicians.
Because of the apparent security it seems to offer its users, the king of cryptocurrencies has been targeted by authorities and governments on numerous occasions in several countries. Moreover, the fact that people are using it to carry out financial crimes does not necessarily help matters. So the situation is painful.
In any case, the next few months could be decisive. In concrete terms, it is mainly the actions of the FED that will define the integration of BTC into the financial systems. The same goes for the European Central Bank (ECB) and local central banks in various countries. Anyway, in the meantime, BTC continues to attract investors despite the recent Russian invasion of Ukraine.
Bitcoin (BTC) is a cryptocurrency that seems to offer stability to its users. Indeed, while the U.S. dollar is facing inflation to the tune of 7.1%, the cryptocurrency remains relatively stable. It only has an inflation of 1.75%/year. Moreover, currently, it is trading between $38,000 and $41,000. It is then understandable why BTC is of interest to many investors.
