If inflation is rising, why isn't crypto more valuable now?

[FairUser]

My question is why isn't crypto rising in price if inflation on major Fiat currencies have soared like crazy? Am I missing something here? It's a shame since Bitcoin was long hailed to be a safe-haven asset like Gold. Your input will be greatly appreciated. Thank you.

Just as you are asking the question, I would like to ask the opposite. In terms of value and time that you are desiring for it, are you expecting things that don't go as expected? Some of the people above have also explained, which I find very clear, is BTC attractive and safe or not. I think it is not based on someone's judgment but your own opinion. What do you think? Personally, I still see the money I used to buy BTC always has many benefits, and even with recent developments, I also see some opportunities for myself. Although many people are panicking, I still have to admit that it is happening to me that everything is still very safe and I am grateful for this.

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[Leviathan.007]

The inflation rate is definitely rising in the long and midterm and during this time when the inflation rate is increasing the fiat and traditional money is losing its value against many other assets, so if you check the financial markets in long term you can easily understand how the price is raising. The bitcoin market is one of them and increasing its price in long term but during the time when the market is uptrend there are some events and possibilities to happen for the price correction is of them and besides that markets crash and price collapse is another thing but even after all these possibilities still if you check the char in long term you can see the true uptrend price movements.

[aprilnot]

My question is why isn't crypto rising in price if inflation on major Fiat currencies have soared like crazy? Am I missing something here? It's a shame since Bitcoin was long hailed to be a safe-haven asset like Gold. Your input will be greatly appreciated. Thank you.

Interest rates play an important role today. and crypto in the bearish trend cycle. so This is the answer for your question. To suppress inflation, the Fed increased interest rates gradually starting last month. at the same time the crypto market is in a bear trend, so people are more interested in investing elsewhere than buying crypto which is clearly down.

[amishmanish]

Bitcoin is inherently tied to conventional economy. Investment in any asset is bound to other economic assets. The fall in fiat economy and financial institution will also conveyed in bitcoin economy. Bitcoin is not the safest heaven. But it is always a good asset to keep

[Wind_FURY]

Because the Fed is tightening the balance sheet through QT and rate hikes, causing investors and speculators in risk assets, like stocks, commodities, and cryptocurrencies to sell.

But ser, in Bitcoin's situation, ZOOM OUT. It has increased by MORE than ten-fold from under $1.00 to more than $10,000, and in my opinion, still in its path of price discovery to $100,000.

That sucks. I thought Bitcoin's price moved regardless of what happens in the real world. But now, it moves along with the stock market and what actions central banks do against the economy. This way, Bitcoin and other cryptocurrencies cannot serve as an alternative to the current financial system. There are still a lot of people who don't know anything about Bitcoin, so I'd say we're still in the very beginnings of crypto's mainstream adoption.

With what happened with LUNA lately, it's going to take a little longer before the crypto market rises back to its former glory. As long as everything remains decentralized, there should be nothing to worry about. Just my opinion

You were here during 2014, before many of us. I would believe that you among most of the people would have already understood Bitcoin's open-market induced volatility.

Plus what you're saying about "cannot serve as an alternative to the legacy financial system" is debatable. Bitcoin functions as well during bull markets, and bear markets, producing block after block without downtime. The Dark Markets continue, Bitcoin casinos continue, everything continues.

[Ucy]

Well, Bitcoin should be about $60-70,000 if not for how its master was badly treated. I hope people understand.

I actually agree it  should be  so called safe haven in times of uncertainty. Price could still rise if you treat its master right. Why not get the master a sustable signature to earn some Bitcoin from his works and posts. Or don't you think it's right for him to also benefit from a future rise in price?

[Semar Mesem]

I think when inflation increases then people really need cash so they sell coins, this is what makes crypto experience a decline, and I think this is normal, I also often sell crypto because I really need cash.

[Abiky]

You were here during 2014, before many of us. I would believe that you among most of the people would have already understood Bitcoin's open-market induced volatility.

Plus what you're saying about "cannot serve as an alternative to the legacy financial system" is debatable. Bitcoin functions as well during bull markets, and bear markets, producing block after block without downtime. The Dark Markets continue, Bitcoin casinos continue, everything continues.

Of course. Bitcoin has always been volatile, but I was surprised to see that there were no positive price movements even though Fiat currencies are experiencing high inflation rates right now. If only people relied on Bitcoin as a unit of account instead of Fiat, things would've been much better. I'm talking about spending 1 Bitcoin without the need to know its current value in Fiat. 1 Bitcoin = 1 Bitcoin after all, right? But the whole world goes around Fiat (the Fiat standard) so this is very unlikely to happen anytime soon.

If Bitcoin becomes the main unit of account, then it would serve as an alternative to the existing financial system. Some governments are adopting Bitcoin as legal tender, but that's not enough to "hyperbitcoinize" the world. I wouldn't worry about that as long as decentralization prevails. Just my opinion

[tomahawk9]

Of course. Bitcoin has always been volatile, but I was surprised to see that there were no positive price movements even though Fiat currencies are experiencing high inflation rates right now

we were led to believe bitcoin was the best "safe haven" in times of economical uncertainty (like the current US recession) and war that eventually hit the world economy (russia-ukraine) because the market was yet to experience something of that magnitude, in a way we were gullible (?) and it was easy for some people to convince others that btc was going to go to the moon during a financial crisis, so the grand majority of the market set high expectations around btc if such turbulent events were to occur. Now we're going through those terrible events and it's ugly and obviously we weren't prepared to the punch in the face (financial crisis and a btc crash). Maybe those things about "btc safe haven" were true before the big investment firms, bankers and wall street entered the crypto market, but that ship sailed a long time ago and the btc price now mirrors traditional markets which are currently on a downtrend and you can be sure (sadly) that btc will follow that trend

Bitcoin is inherently tied to conventional economy.

maybe after the 2017 bull run, but prior to that literally nobody believed btc was tied to global or tradional markets.

[Taskford]

I think when inflation increases then people really need cash so they sell coins, this is what makes crypto experience a decline, and I think this is normal, I also often sell crypto because I really need cash.

Also the feeling of losing something huge is one of the biggest reason of it since there are some people which is open minded on things they settle with them. For what's happening on outside world and bitcoin price still dumped then maybe we should wait and see on which price should we enter.

I also sell some of my bitcoin earnings to use it on personal matters, but I also make sure that I still havea huge balance to be save for future.

[Gyfts]

The inflation crisis is fairly unique because Bitcoin hasn't been around long enough to truly test the waters of an inflation crisis. USD hasn't experienced this sort of inflation since the 1980's, and the European Union is having challenges of inflation of their own. We would need to wait a bit longer to truly see how the market reacts to Bitcoin and inflation because usually the inflation target is 2% annually and it's only post-COVID where most countries are having extreme challenges with inflation. If USD inflation spirals out of control more than it already has, I could see people using Bitcoin as a safe haven driving up the cost but the state of the global economy needs to be considered too. If people don't have money to invest, it's conceivable that crypto would less valuable in congruence to every other asset which price is in the gutter at the moment.

[doomloop]

I think when inflation increases then people really need cash so they sell coins, this is what makes crypto experience a decline, and I think this is normal, I also often sell crypto because I really need cash.

Exactly, immediately the economy experiences some applied amount of unusual inflation, prices of things tend to go up immediately, the supply of coins becomes excessive that period and subsequently, excessive supply of it definitely and mostly leads to declination in the value of the Bitcoin, hence the bearishness occurs with immediate effect.

But in all, the point is, irrespective of the inflation experienced with Fiat, it hardly and rarely ever extends to Bitcoin which is one very good thing about Bitcoin.

[Darker45]

Perhaps it hasn't really been established that Bitcoin is a safe haven? It is definitely a rising store of value and asset, but not really one to which you can safely run during times of a falling fiat or a crazy inflation or a crashing stock market or an invasion. As a matter of fact, the pattern has somehow pointed to Bitcoin's price moving more or less like the traditional market, although this is debatable. What is established is that Bitcoin will give us a good return in the long run. So I guess it's better to stick to HODLing despite the short-term price fluctuations.

[arwin100]

Perhaps it hasn't really been established that Bitcoin is a safe haven? It is definitely a rising store of value and asset, but not really one to which you can safely run during times of a falling fiat or a crazy inflation or a crashing stock market or an invasion. As a matter of fact, the pattern has somehow pointed to Bitcoin's price moving more or less like the traditional market, although this is debatable. What is established is that Bitcoin will give us a good return in the long run. So I guess it's better to stick to HODLing despite the short-term price fluctuations.

Many are just afraid with current condition without knowing the real scenario happen to the market. And if there's no huge news lik Luna tragic incident we might not see this price dip since for sure many will turn their attention on bitcoin because its starting to gain momentum of adoption especially when certain countries legalize it and many people use thia for their transactions.

[horrifiedx1]

Perhaps it hasn't really been established that Bitcoin is a safe haven? It is definitely a rising store of value and asset, but not really one to which you can safely run during times of a falling fiat or a crazy inflation or a crashing stock market or an invasion. As a matter of fact, the pattern has somehow pointed to Bitcoin's price moving more or less like the traditional market, although this is debatable. What is established is that Bitcoin will give us a good return in the long run. So I guess it's better to stick to HODLing despite the short-term price fluctuations.

Many are just afraid with current condition without knowing the real scenario happen to the market. And if there's no huge news lik Luna tragic incident we might not see this price dip since for sure many will turn their attention on bitcoin because its starting to gain momentum of adoption especially when certain countries legalize it and many people use thia for their transactions.

With the Luna incident, it had a fearful effect on investors, but before that, because of high inflation, the USA raised interest rates, so the stock and cryptocurrency markets were affected. Of course, with the bearish season this time it happened because of the withdrawal of investor funds from cryptocurrencies and of course later investors will return along with the news of the fomo that occurred

[Zilon]

Asking a general question on why crypto isn't rising amid the inflation on major fiat currencies hope you know most crypto are shit coin. It will be more better if you narrowed your sampling method on Bitcoin alone at least that way you can evaluate with good statistical proof how much Bitcoin has grown in the past 4 years.Not to mention how  Bitcoin grew from $1 to $68k in a space of 14 years. Gold and other valuables has been since time memorial with steady centralized price manipulation yet Bitcoin still stands above $30k. Diversified portfolio could be the only way to satisfy your quest

[justdimin]

With the Luna incident, it had a fearful effect on investors, but before that, because of high inflation, the USA raised interest rates, so the stock and cryptocurrency markets were affected. Of course, with the bearish season this time it happened because of the withdrawal of investor funds from cryptocurrencies and of course later investors will return along with the news of the fomo that occurred

Both of those situations coming back to back caused the big crash for sure. I mean FED getting the money back from the market is a big deal for sure, and they will say that there will be some sort of situation where they will pump that money back again eventually, they will increase the rates to a point where the market will need more money eventually again, and they will drop the interest rates again which will pump a ton of money back to the market.

If we wait long enough then we will see that happening in the near future. I just hope that we get to see that, it is not going to be that much of a trouble and it is going to be quite common situation as well and we are going to end up seeing that very soon, so holding is very important.

[jaberwock]

You were here during 2014, before many of us. I would believe that you among most of the people would have already understood Bitcoin's open-market induced volatility.

Plus what you're saying about "cannot serve as an alternative to the legacy financial system" is debatable. Bitcoin functions as well during bull markets, and bear markets, producing block after block without downtime. The Dark Markets continue, Bitcoin casinos continue, everything continues.

Between people who bought accounts, and people who gave a break, I have seen plenty of old accounts that didn't know what bitcoin stands for or how it moves, and I have seen people who had newer accounts, and they look like they registered in 2020-21-22 but they had previous accounts so they are masters of bitcoin. So, account age doesn't really show anything.

Bitcoin will always be volatile and will stay that way even at the face of inflation, but what we are mistaking right now is that FED is trying to stop that inflation, and taking the money back, and giving high interest rates, which means that the inflation will drop, and hence why the drop in crypto, whereas when every nation printed money, the price of bitcoin reached ATH.

[speedy963]

It's still doing better than most long term investments though. A change in time frame while looking at your charts will be able to easily fix this worry of yours. Although, it only applies for long term investors and not the weak-handed people or to most of the leverage lovers specially those doing high levs. Not that I'm generalising or assuring anything but yes, this is the case most of the time.

Now, although mass adoption is happening faster than ever,  the economic crap is messing thing outside of crypto a lot. Which means not a lot of people are eager to risk investing on crypto other than those that really understand this industry or the people that are really pro-crypto. While people are looking for better investments, people are also hesitant. Unless the whales themselves initiate a huge buy pressure, the smaller people won't have that much confidence to invest. At least that's how I currently see things in this industry.

[davis196]

There are two types of inflation:
1.Demand inflation-when money printing machine goes brrr... and there are too many paper money circulating in the economy.
2.Cost inflation-when the prices of important commodities increase due to non-economical factors, like western sanctions over Russia, the war in Ukraine, the supply chains getting disrupted by the pandemic, the microchip deficit, etc...
We are witnessing a combination of the two types of inflation right now. The investors are selling risky assets and buying safe heaven assets like gold and real estate. Bitcoin(and crypto coins in general) simply isn't viewed as a safe heaven asset. In times of crisis and uncertainty,the investors are sticking to what they are familiar with.