Worried About Inflation, Many Investors Turn To Crypto

Investors turn to crypto due to inflation concerns (Financial Express)

JAKARTA – Inflationary pressures are getting tighter, this has already been felt by US consumers and the world's population. The latest data proves that the Consumer Price Index (CPI) rose 6.2 percent last October as a comparison in the same period last year.

Launching Cointelegraph, due to the higher printing of banknotes, traditional financial markets plunged on November 10 yesterday as fears of uncontrolled inflationary pressures and the loss of consumer purchasing power were weighing on investors. The major indexes also slumped from new record highs previously set on Sunday.

This condition is in stark contrast to price movements in the crypto market where bullish momentum has triggered a 4.7 percent rally in Bitcoin (BTC) prices along with the announcement of the data above.

The high rise in inflation during 2021 has triggered many calls for the Fed to end its easy-money policy and raise interest rates. Many claim that the central bank has been cornered and has no easy choice moving forward because rising interest rates could make servicing the US national debt more challenging.

Former US Treasury Secretary, Larry Summers assessed that current conditions would weaken the central bank's ability to guide the country's economy.

"Global financial markets appear to be anticipating slow growth and low real interest rates for the next few years, which will undermine the ability of central banks to guide the economy," Summers said.

With interest rate controls being the Fed's primary tool for exerting influence in markets, it appears there is little other than continuing to print money that the central bank can do in response to the ongoing challenges.

Even so, the owners of cryptocurrencies are considered to have benefits and protection from inflation. Because the price of Bitcoin and altcoins can be a hedge against the decline in currency values.

According to data from Bitcoin Stimulus, Americans who put their $1,200 stimulus check since April 2020 into BTC, have now their Bitcoin holdings skyrocketed 914 percent. The money they invested into BTC is now worth 12,172 US dollars.

At the time of writing, Bitcoin is trading at Rp931,930,934 per coin. BTC price broke its new ATH on November 10 yesterday. In the last 24 hours, the price of BTC has decreased by 1.9 percent.