In December 2020, the value of Bitcoin seemed more negligible, and since then, the price growth has been phenomenal. It has gone by 195 per cent, rising from 23K USD to 64K USD. In a sense, it has been witnessed as a meteoric rise for the digital coin. When you look at the key reasons behind the same, it will vary; however, we can see Bitcoin growing in a big way. It seems to have matured differently, and many available icons and billionaires have invested in it. Even companies, including financial institutions and other groups, have planned to invest in a big way in this regard. Ever since then we have seen a constant rise despite the fall of the coin. It would be interesting to explore the reason why the price of Bitcoin keeps on soaring. You can even explore sites like bitcoin trading software while we modestly deal with this issue.
Inflation and Buying Capacity of the Fiat Currency
In 1971, President Nixon in the US talked about removing gold as the yardstick of calculating the dollar value. Since then, the number of USD seemed to have increased at a more excellent place. It seemed to have gone up in the year 1975 and burst before the Pandemic last year, and we see the total supply going high, reaching up to 274 Billion USD to get over 4 trillion USD by March 2020. Since then, we have seen the total money supply going high despite the Pandemic reaching the next level. Currently, the Congress is talking about yet another bill that will revolve around 1 Trillion USD targeted to people who suffer from the Covid thing. If this bill passes, things will change in the coming times.
On the other hand, people are suffering a lot in businesses and jobs, which are now shutting down. Therefore, the boost in the money supply seemed to have gone beyond the long term impact when we think of buying the USD. With this, there is a fear of inflation, and it would rightfully keep on moving high. To combat this issue, we see the inflation investors seeking the assets in a big way and thus maintaining the real value to applaud the same. Over the years, we have seen a reasonable search for storing the asset’s value that seemed to have gone up with the inflation. There are several assets, which are counted among the store of value. It remains the most common thing to keep in mind, as we do with gold and precious metals.
Bitcoin and Inflation
As we deal with the above situation, the only best problem that comes to our mind is Bitcoin. This digital coin helps in differentiating itself in a big way. We have seen a code written over Bitcoin and how people have seen it coming along with it. It has become simple to see how several people are seen supporting people in this context. It further helps make Bitcoin the critical asset seen in this world that can help bring the fixed and finite kind of supply. The experts feel that the fiscal stimulus is not being added to the current system, particularly those after the Pandemic, to support the economy. It has further helped the investors to think big and feel the value of it. It addresses inflation along with securing their profiles as well.
The experts feel that to stimulate the economy, you need to move again. It has helped the investors feel the difference and go for the valuable thing that offers the inflation hedge and how people secure the profiles. Another expert speaking on this issue claims that it is vital to check with the investors how they think and act. Many investors are not counting the same under the collocation between different virtual currencies, including Bitcoin. One can find conventional money like USD having their benefit as you can print them in any number you want. Thus a specific part of the appreciation of Bitcoin price can be easily connected to the fears of inflation, and the hedge plays an integral part of it. So, this is how things work. Hope you have got it.