Cryptos to counter inflation: reality or idiocy?

The crypto market was further shaken when the US inflation rate hit a 40-year high of 8.6% in early June. In France, INSEE said the annual inflation rate measured by the national consumer price index reached 5.2% in May, from 4.8% in April, its highest level since September. 1985.

The overall cryptocurrency market capitalization had fallen by 6.63% to $1.04 million at the start of the 3rd week of June.

Brian Armstrong Says Cryptos Can Beat Inflation!

According to NewsBTC, Brian Armstrong spoke about the current bear market compared to previous declines. He pointed out that the current trend has different characteristics this time around. The main reason, he says, is that digital assets are now more widely recognized and have more applications than in previous market bear cycles.

He also said that the distinctiveness of the current cycle was partly due to the macroeconomic climate, which exacerbated the market. But, perhaps more importantly, investors and traders consider digital assets to be as volatile as high-risk tech stocks.

Furthermore, Mr. Armstrong believes that the total DeFi market capitalization must grow more than 5-10x from its current level before it can be considered an inflation hedge.

Cryptocurrencies are not a good inflation hedge, says Moe Vela

Moe Vela, an American lawyer and policy adviser, said that contrary to the claims of many crypto fans, virtual currencies are not a reliable hedge against inflation. Recent developments have only served to confirm his view.

Vela pointed out that cryptocurrencies, which have grown in popularity over the past decade, have never been tested in an inflationary environment. And now that inflation has returned, they have shown that they are not immune.

Read also Crypto nugget: Can this promising underpriced crypto surpass $10 at the end of 2022 and make you +1000%?

Over the past six months, Bitcoin, for example, has lost half its value. Many stablecoins that are tied to the value of fiat currencies, commodities, or other financial products, momentarily fell below their peg price.

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