Does inflation affects bitcoin?

[Blisszi]

Many nations at point of time are going through cashless policy and this policy affects price of things in different market regions of the world.

Can inflation which is the high demand of price over few goods or products actually controls the stability of bitcoin pumping or going down?

Because I believed where people are facing high price over fewer goods makes it difficult for people to trade bitcoin with little or no capital! So can inflation makes the market cap of bitcoin not having a reality face of surviving?

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[Hispo]

I believe inflation can indeed affect the price of Bitcoin, because what you have mentioned on the demand decrease for satoshis when people cannot afford to trade or hold.

However, I believe these situations are not a threat whatsoever for the future growth of the Marketcap, one of the reasons is the deflationary nature of Bitcoin itself. Just my opinion, of course. Always DYOR.

[OgNasty]

The idea that fiat currency is going to be inflated away to being of no value is what makes a lot of people pick up a stack of BTC just in case.  I think we're still in the growth phase of BTC, but at some point when it's penetrated enough markets, it's value will be driven not by it's growth, but by the decline of fiat currencies.  It's hard for people in developed nations to really comprehend inflation above 100%.  Watching your savings disappear as banks won't let you access it anyway.  It's a nightmare that most people don't think it really possible for them.  Maybe it will seem more possible in the coming years as governments struggle with recession and war while Bitcoin becomes more scarce (and hopefully with more use cases). 

[un_rank]

Many nations at point of time are going through cashless policy and this policy affects price of things in different market regions of the world.

Theoretically a cashless society or policy does not affect the price of things. It is simply a means of accepting payment through other channels besides collecting actual cash.

Can inflation which is the high demand of price over few goods or products actually controls the stability of bitcoin pumping or going down?

Inflation, which is a drop in the purchasing power of fiat currencies, meaning more money is needed to make purchases does affect every asset, Bitcoin included.

Because I believed where people are facing high price over fewer goods makes it difficult for people to trade bitcoin with little or no capital! So can inflation makes the market cap of bitcoin not having a reality face of surviving?

Inflation exposes the frailties of fiat currencies, pushing people to an inflation resistant asset like bitcoin and thus driving the value up.

- Jay -

[DeathAngel]

Bitcoin is the perfect inflation cheat device but you have to be willing to hold long term. The financial situation, worldwide is a mess right now.

If we go into a deep worldwide recession then everything will nosedive, most probably bitcoin too. This just provides us with great opportunity to add to our stack though.

You will make extremely handsome profits if you buy bitcoin now.

[blockman]

Because I believed where people are facing high price over fewer goods makes it difficult for people to trade bitcoin with little or no capital!

I don't see the connection between having high price goods and consumables with bitcoin's price. Bitcoin is a deflationary asset and the more the price of these goods is being ticked in by inflation then that means that bitcoin's going to be higher than theirs.
Regardless of the situation of an individual, whatever the price will be for bitcoin, they'll allocate funds to it to buy or trade it as much as they want. Then the obvious is for those that have no capital, there's really no way for them to buy anything.

[Hypnosis00]

If we think about the price of Bitcoin, inflation will just affect fiat money and Bitcoin is far in reach for it.
But if we talk about the demand for Bitcoin investment. Of course, people will think now that the use of Bitcoin is somewhat a good way to escape from inflation but the question is if it is acceptable in our country and stores as we know that only a few had adopted it for now. It means that we still need to convert our Bitcoin to fiat in order to use it. Meaning we are still hit back by inflations.

[franky1]

depends if you are a smart investor or not

when the words "inflation" started being shouted in late 2020-late 2022 due to all the financial fiddlings of covid cheques and ukrainian-russian war causes of fuel cut-offs and market manipulations

alot of smart people knew that inflation meant their FIAT would buy less goods in the future, so they would buy supplies and products quickly to stockpile for a year+, before the prices would ultimately rise

this meant they then had their ongoing income not required to buy things regularly due to stockpiling goods. and so free to invest...
this meant they would then invest it in inflation beating assets

which meant buying crypto/gold/ etc

also with electric prices going up meaning mining costs going up. this then means less people selling coin at previous bottomline costs because bottom line costs have gone up

but here is the thing
th results i just explained of inflation.. have yet to move in
mining farms buy electric supply in 1-2year lump contracts meaning they are still priced in at the 2021-2022 rates and yet to feel the 2022-23 rates hit them

alot of businesses stockpiling materials in early 2022 have yet to sell the goods they produce using those stockpiled cheaper produce. so yet to profit from that planning. and so yet to get ongoing income/profit .

but it will happen

[Gyfts]

Inflation induced by reckless spending doesn't directly control Bitcoin stability. But generally speaking, Bitcoin could provide some level of relief for inflation because it isn't inherently designed to reduce purchasing power.

Keep in mind, a consumer who only holds Bitcoin is going to be affected by inflation the same way someone with fiat would be if the inflation isn't induced via money printing but rather consumer goods increasing in price collectively due to external circumstances (ie a war). But with fiat, once new dollars are printed, it becomes difficult to remove them from circulation so your purchasing power will go down proportional to the amount of new dollars introduced.

[mk4]

Inflation affects markets in general — may it be investment assets like stocks/crypto or assets in general, commodities, liabilities, you name it. Do some quick research on how markets in general reacted to the approximate 8% inflation of the USD.

[coolcoinz]

There's this thing called inflation death spiral. When inflation remains at 2-3% people don't notice it. Goods and services don't visibly go up in price every month and people spend money when they need to. Situation changes when inflation hits double digits, at which point prices can go up month to month and you see it. That makes people spend more money to get rid of it, more spending means more loss of value for the currency and more inflation.

Such event, like the ones in Venezuela, Turkey, Zimbabwe, make people dump currency for a better store of value and that includes bitcoin, so the price is and will be affected positively by inflation. On the other hand countries try to slow this selling of currency by adjusting interest rates and this can make some investors (mainly those who are now in debt, or who invested on credit) sell their bitcoin. This is a temporary situation though because in all possible scenarios bitcoin pumps in the end.

Scenario 1: FED keeps increasing rates and crashing the markets. Traditional markets will dump and take bitcoin for a ride, but stocks can go much lower than bitcoin. Eventually people will start switching to hard assets like bitcoin and gold and make bitcoin decouple from stocks.

Scenario 2: FED gets scared of crashing the markets and pivots. They'll go back to printing and realize that their target inflation levels are unachievable. Everything goes back up, bitcoin pumps for speculative reasons.

Scenario 3: We get an inflation death spiral that leads to hyperinflation and a monetary collapse. Again people will turn into hard assets, bitcoin goes up.

Scenario 4: people get scared of FED rates, stop taking loans, stop spending, inflation goes down, FED keeps the rates at current level to stabilize the markets. Bitcoin will remain stable and pumps after the next halving as difficulty rises.

[Cryptomultiplier]

It does indeed as long as it has to do with finance. The stock market too. As long as prices are affected, Bitcoin prices at certain seasons will be affected.
Although, Its adoption has helped cut down expensive lifestyle for those who had long been seeking better ways of diversifying funds rather than blow it all away on luxurious or pleasurable lifestyle.
If one isn't earning in Bitcoin,  the best way to not be left out is to invest in buying some and HODL. The scarcity of funds for you will inculcate the discipline to be patient while planning towards the future.

[Zorigi]

In this case, of course, everyone has different opinions, but everyone also has reasons. if I think the answer is, yes,, that bitcoin will definitely be affected by the collapse of the world economy, or inflation.
but I think even if the price of bitcoin goes down, the decline won't be much either. so it's just a slight drop.
because bitcoin is unique, the more the price goes down the more people buy it. that's why many say that investing in bitcoin is safe.

[drwhobox]

Inflation will effect everything surrounding fiat. Bitcoin is no exception here, but the price is quite right to buy bitcoin now and hold them. Because as we can see clearly inflation is not going to stop anytime soon. The price of everything will go high and nothing can hold them down.

I don't see the connection between having high price goods and consumables with bitcoin's price. Bitcoin is a deflationary asset and the more the price of these goods is being ticked in by inflation then that means that bitcoin's going to be higher than theirs.

The higher the price of everything goes the lower the value of fiat will be, so if you want to buy bitcoin now you have to pay higher price against US dollars. Not everyone here is from USA so the exchange rate of USD is taking a part here.

[Charmekkd]

with inflation in this world, of course it will affect the price of bitcoin. but with the fall in the price of bitcoin, of course, it provides a good opportunity for those interested in buying bitcoin, because bitcoin is a valuable asset and the number is only 21000000, so with inflation, the price of bitcoin must have fallen and we shouldn't waste this good opportunity to buy bitcoin.

So don't be afraid of inflation.

[hatshepsut93]

Bitcoin is so volatile that it's impossible to say whether it was affected by inflation or not. We have the market data from 2021-2022 which shows that Bitcoin didn't react to inflation. So it's not a traditional hedge against inflation like gold right now. But maybe if not for inflation and the narrative of Bitcoin being digital gold, it wouldn't have gotten to the level we have today.

[GreatArkansas]

I was also curious about this, remember last year or a few months ago, the inflation rate for most of the countries in the world experience a pump on inflation rate.
So for me, I was expecting also that Bitcoin is the solution for this, if you are afraid to lose the value of your fiat currency, put it on Bitcoin, but as you can see also we saw some dumps during that time and now seems we are recovering.
So for me, there's some part that Bitcoin is affected by the inflation rate.

[Darker45]

I'm not sure if there is really a significant effect of cashless policy over the rising prices of goods and services. On the contrary, it is even possible that a cashless policy would somehow limit the people's spending to the point that the demand on goods and services is significantly reduced, thereby causing the price to fall. Imagine how much money that should have circulated if bank withdrawals in some countries were not reduced to a very low minimum.

Inflation doesn't have a single effect on Bitcoin. On the one hand, somebody who is severely affected by the rising prices of goods and services could let go of his/her Bitcoin savings. But on the other, in a country where inflation is high and fast, saving in Bitcoin is a perfect choice.  

[CryptoBuds]

With what happens in 2022, it can be seen that speculative assets are all affected by inflation, and bitcoin is no exception. It can be said that in the short term, bitcoin is still affected by inflation, but in the long term, I think inflation does not affect bitcoin. If you hold bitcoin from 2014 or 2017 to the present, even though the value of bitcoin has dropped 80% since ATH, it is still at a high growth compared to the price from 2014 or 2017. That shows bitcoin has beaten inflation in the long run. If you invest in bitcoin now, it will not save you from ongoing inflation, but it will certainly help you avoid another round of inflation in the future.

[dansus021]

According to fideily Investment, the inflation have an effect to bitcoin
"As inflation rises, the U.S. Federal Reserve (the Fed) and other major central banks may be inclined to continue to raise interest rates or tighten monetary policies to slow the price rises. As a result, many asset classes, including cryptocurrencies, may see their prices fall." - https://www.fidelity.ca/en/investor/investorinsights/digital-assets/what-rising-inflation-means-for-bitcoin/

In short term And also I notice it when I do trade maybe some member here will notice it too when the FED tend to increase the interest rate the market will shake and crypto market usually fall down and it happen not just to crypto market but also to other investment instruments.

In long term you can notice that price of bitcoin it against the inflation the US dollar lose its value over time but the bitcoin like gold that increase the price over time