Today the American Department of Labor the new inflation rate for the month of November has been announced. The results are downright shocking. Inflation is higher in November than it has been in the past 39 years. Prices of the crypto and stock markets can be quite affected by these skyrocketing inflation figures.
Inflation
According to the Department of Labor the US consumer price index rose 6.8% in November compared to the previous year. That is the fastest growing inflation rate since 1982 and the third straight month where inflation was above 5%.
#Inflation impairs our economy like #Inflammation impairs our anatomy. #Bitcoin
— Michael Saylor⚡️ (@saylor) December 10, 2021
Almost everything is getting more and more expensive. Prices of food, energy, transport, houses, etc. are rising month after month and the end does not seem to be in sight for the time being. The demand for goods is high, while the supply has been squeezed due to the raging pandemic. New concerns about the future arose recently after the discovery of yet another new coronavirus variant.
Bitcoin
Many crypto analysts believe that bitcoin (BTC) and others cryptocurrencies be extremely suitable as hedge against this extreme inflation and for this reason can be stimulated by the current inflation rates. Investors all over the world try to protect their assets during inflation. Because money is constantly decreasing in value, a way is being sought to protect the assets against this.
Historically, gold has been the inflation hedge preferred by many investors. However, we can now also add bitcoin to this. Investors see the value of bitcoin as a way to protect wealth against inflation is becoming increasingly attractive.
The ‘digital gold’ was John Auters Bloomberg recently called “the best inflation hedge out there”.
Depending on how you look at it, Bitcoin has been the best inflation hedge around. Over the last decade, the headline CPI figure has risen roughly 28%, and denominating that gauge in Bitcoin shows deflation of 99.996% https://t.co/bBO56UDvUh
— Bloomberg Crypto (@crypto) November 12, 2021
It is difficult to say whether a trend of increasingly extreme inflation will have a positive effect on bitcoin. There are a lot of other important factors that could influence this, such as far-reaching measures by the central banks. Nevertheless, bitcoin has established itself as an excellent protection against inflation and with the entry of investors looking to secure themselves, the bitcoin price can expect a positive boost.
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