Bitcoin Forum

In the UK, the fall in the pound, which picked up recently, has had a major impact on inflation, which hit 3% this month.
How can inflation and rise in interest rate affect the price of Bitcoin?

I don't think it affects bitcoin price.  Bitcoin is still not well known among ordinary people. They might prefer to invest their money in other currencies or gold or any other thing. Bitcoin is not an option for them.

Not really related to Bitcoin unless people get sick and tired of the dropping interest rates and convert to bitcoin as a result.

I Think in terms of direct value, their isn't a correlation between the two but whenever the economy is up Bitcoin will benefit in the long term, because inevitably price increases as the people in the network are willing to cough up more $$$ in trade for coin.  So it's a delayed reaction but definitely we can count on a burst of upward growth.

If the inflation rate rises and the interest rates haven't really caught up with inflation (in the UK's case I think the base interest rate is still only 0.25%), it may cause people to dislike the banking system due to their inability to save up money that retains its value.  This would make people more likely to turn to some sort of relatively stable investment such as real estate, but if they were a bit edgy then maybe they would go to BTC due to that as well.  

If the inflation rate stays low and the interest rates are low, it would make the idea of having physical cash more appealing, which is good if people are privacy-oriented and would make them feel more financially free, which may make them less likely to turn to BTC as a currency in the short term.

In the long term I'm not sure it has much of an effect, but for as long as unusually high or low interest rates are happening it may affect people's interest for sure.  It may also affect the publicity of a decentralised system.

The interest rate and inflation of a single country doesn't really effect bitcoin price in any way. They are indicators of a real world economy and not representing and no crypto is directly linked with these economical indicators. Consider bitcoin as a separate economy which runs parallel to the main stream economy, but doesn't really show any effect on the real-world economical factors. Instead bitcoins price is directly related to its acceptability. The more country will accept bitcoin the more investment will inflow in to it and the price will rise accordingly. 

Why do you think everything has an effect of the price of bitcoins ?
There is nothing to do between both of them as they have nothing in common. They are two separate economical systems.

Even if that interest rate is so big that people start looking for other forms of investments, the number of people who would go for bitcoins and crypto in general won't be big as they're looking for something that has stable value and an almost constant price increase.
 
So something like real estate would be much better for them.
So no, whatever happens the effect won't be recognizable.

Money always flow to where Interest Rate is lower so a Rise will move money away from fiat into bitcoin and makes it more valuable. But for regular market in fiat there is a drop in liquidity and decrease in valuation making it flow again to better options like foreign markets and crypto exchanges

Many people think that any economic, political and military disasters in the world will always fuel Bitcoin's price, but time has proven that in reality their effect is almost non-existent. We would need something like a new global economic crisis to actually feel some effect on Bitcoin's price, and even then it's not guaranteed that it will be positive, as some experts argue that Bitcoin might suffer too because people will have less money to buy it. If you want to base your Bitcoin trading on news, the news that mention Bitcoin directly should be more important than some general news.

the interest rate is unlikely to affect the value of the bitcoin sale price,. since bitcoin is different from fiat currency, the only bitcoin we can determine the price,, because the more bitcoin is used then the price will be expensive,, and vice versa .. for that we there is no need to monitor interest rates and fiat currencies in order to hold the control of bitcoin exchange rates...

I don't think inflation will affect bitcoin directly, its one of its characteristic that Satoshi's paper told us because it is limited. The interest rate of conversion may affect bitcoin because many investor would have doubt if the profit they will gain will worth it with the presence of high conversion rate.

It could in theory, thanks to Bitcoin being an excellent safe haven of value. If people start looking into Bitcoin to save their money from inflation, then demand would increase, and along with it, the price.

In practice though, it would take a drastic change for lots of people to actually start moving their assets into Bitcoin. Relatively small fluctuations, such as in this example, can't really create any significant change to demand. I don't think anything short of an impending economic collapse will make entire countries flock to Bitcoin, and maybe not even then. They'll still have USD, gold, etc. as an option.

 8)

Their's nothing will happen with Bitcoin prices, since so many people don't know about the Bitcoin and it's growth. 2 to 3 years may require people to trust and invest in Bitcoin.

Just ask to your neighbors or do they heard about Bitcoin and all you find the answers with them. If people know Bitcoin is the best investment then they will invest into it, as we all need money and it is the lifestyle for us.

Thank you all for your answers. So, what levels or types of economic changes in countries could affect the price of Bitcoin?