I came back from holidays yesterday evening and am still slightly tired from my 13 hours journey. I spent a nice time in Turkey. I also had a lot of discussions with people living there and one topic came up all the time: Inflation. It is hitting Turkey hard but I believe that other countries also suffer from it.
How is the inflation in your country and how do you expect crypto will behave in respect to inflation?
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In the country where I live, inflation is about 3%, and prices are rising, so I can only buy a little less.
Cryptocurrencies should do better in terms of inflation.Interest rates are high.
I agree with you. Once prices get stable again, I believe that crypto will do well.
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Actually, we experience hyperinflation though the governors try to hide it. Crypto is outperforming the fiat inflation even in the bear market. Crazy times 😅
Two weeks in Turkey and I saw hyperinflation in action lol. I'm quite pesimistic about the stable 14% intrest rates... Seems strange economics to me lol
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Well it's not just inflation in one country alone, the last time I heard of inflation like 4hours ago was it's a global one. Seems globally resources are channelled into something else.
We just expect the prices of crypto to also be on a dipping side or maintaining a moderate graph of pump. And probably that's were regulation is important too.
Inflation seems to be everywhere at the moment and it's worring how it affects a lot of people.
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Definitely suffering from the effects of inflation over here (Singapore), although it's probably not as extreme as those we see in other countries. It has probably been offset somewhat by the rise in currency value of our dollar too.
As for crypto, I don't think it's going to hold as a store of value against inflation, as much as what it was preached to be during the bull runs. The majority of people clearly see it as a speculative asset and I don't see it recovering to its previous heights anytime soon.
I totally agree with you. Crypto was a store of value against inflation before it became a volatile speculative asset for many people who have no real idea what crypto is all about. This bear market will probably kick out a lot of these players and a lot of projects that weren't that good in the first place. I think however that the remaining ones will be worth gold...
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I don't overthink this situation rn. It's kind of unbalanced because of the US Interest rate news, the impact on investor change direction, and so on. Inflation like this... I just turn my real money into a safe place with steady low interest for now. Hard to predict with such inflation, Just hope crypto will survive and keep the steady good price.
I'm quite confident that crypto will survive and there is one advantage over fiat: it's kind of visible how much of the crypto exists, how much is printed and especially who is printing it...
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Prices of every day commodities have risen sharply. It's belt-tightening season. Spend more on necessities and forego luxuries for now. Thankfully, we were able to upgrade some stuff we need on the home front. I'm hoping crypto can help esp in terms of saving for the future. Can honestly hardly save much from fiat due to the increase in living expenses.
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It's horrible to see our expenses go up and our income not moving. Inflation is a way to take the money away from everybody to pay dept that the countires took a long time ago.
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We are at about 8% inflation in my country. Alot of people have gone from having a little bit extra to save each month, to barely covering all of their expenses.
I think we will continue to see crypto move down or sideways until things get more under control, because people are liquidating crypto to pay bills, and they don't have spare cash to invest. !LUV
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I agree with you that the lack of available funds for people and businesses forces to sell crypto. In the long run, I will have more trust in crypto than in fiat...
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!1UP Inflation in Brazil has always been high and in this period it is even higher. This coupled with the fact that many Brazilians entered the cryptocurrency market at the end of 2021 (and lost a lot of money trying to follow gurus) caused many of them to exit the financial/cryptocurrency market entirely. The famous phrase: buy high and sell low.
It's always when all the people who don't know anything about it go into it, that we should sell our stuff lol
Indeed 😂
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Inflation is high so everything will cost more compared to one year ago. In regards to crypto, I think crypto is so volatile that inflation is relative. It really depends on where you measure it from. Card prices in USD have dropped but in DEC have remained relatively stable. Land runs about 330 hive. It was in the mid 300 hive when hive was $3.00. Crypto is like the roaring 20's millionaires everywhere, and then they weren't when the great depression hit. I think crypto touches 1 or 2 percent of people so not mainstream yet. Most Hive-Engine tokens have built in inflation(lots are printed all the time). Thus it takes more tokens to buy the same thing today that was cheaper in that token yesterday.
!PIZZA
What you say is quite true and I think we are lucky here to have hive-engine tokens. We see what happens when a lot of tokens are printed or people don't want tokens anymore. It affects the price and fiat is not that different...
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I'm not an economist. Inflation is high and I think the worst is yet to come with the economy in general. Crypto will survive in my opinion. Now continues to be the time to build your core positions in things you think will survive long-term. Once we all come out the other side, those will be the ones that really take off. The cryptos that continue to develop through the down times are the ones that reap the rewards when times get good again. All we have to do is survive long enough to let it happen. :-)
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When I see the price of BTC devaluate in respect to USD which in turn has like 10% inflation rate... then I think that I want to get more BTC ;-)
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In the USA, inflation has not been this high since the early 1980's. The global pandemic sort of messed up everything causing it to become unbalanced more than it was already. The supply and demand of goods. Lock downs reduced demand then when they were lifted everyone ran out and started buying driving up demand for almost everything but the shipping to provide the supply is not in place. No telling when balance will be achieved, if ever again. It seems like there is just one thing after another that is happening globally that throws off the balance even more. Crypto is one of those things although the full effect of crypto is not yet felt by all since it is not yet mainstream.
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I agree that we are living in troubled times and one crises follows the previous ones. I wonder how things will evolve, especially on the crypto front.
Inflation in the USA is ridiculous. I expect more and more Americans to get into crypto as the empty husk occupying the White House is helpless to do anything and his handlers are determined to subjugate the peasants and impose an eco-fascist regime. Ordinary Americans are fed up with the government--even lifelong Democrats see that their party is not the promised messiah. They are seeing that Libertarians like me were not crazy, but were trying to warn them.
It looks like the usa doesn't have this inflation under control at all. At the moment the dollar profits because the interest rates are higher than all the rest but I believe it will be a fight to have the highest interest rates as possible so that inflation is not imported from outside... We will see but I don't think the government has things well planned...
Government tends to ruin everything it touches, including the economy. !CTP
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With global inflation, the declining value of fiat currencies, and the loss of confidence in fiat, people will start to take a more serious look at crypto as a viable alternative.
I also think that will be the case but we will need to wait a bit longer until people seriously start doubting their currencies I believe.
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Prices are up between 50-100% here and wages are not increasing hardly at all yet..
Once the wage increases come, we should see this start to feed into crypto and asset prices from next year imo.
When I see crypto devaluating towards fiat where fiat is devaluated itself because of inflation, then I think it could be a good time to fill our bags :-)
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Slovenia is in the Eurozone so I don't have much to philosophise about. I hope they can control it because if they can't a lot of things can happen. I remember when we lived in Yugoslavia and there was hyperinflation towards the end of the collapse. We dealt with that by exchanging money for Deutschmarks as soon as you got it. That was how we preserved to value.
It was also possible to make money. If you had cheques, you went to Croatia and cashed them in a corner bank. It took a couple of weeks before they came to your bank for payment and then they were worth nothing. ;)
How we are going to do it now, I do not know. I wouldn't exchange € to the US dollar (the same shit I think), How the crypto scene will react to this I don't know. Probably better than fiat because you can program inflation here. We will see.
At the moment it's difficult to see what currency can keep the value. I wouldn't trade euro for $ or any other currency and still I believe that crypto will play an important role as value keeper for the simply fact that they aren't manipulated by the central banks...
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Inflation over in Singapore has gone up a lot like the rest of the world, but I think there are efforts on the monetary and fiscal front to lessen the impact, so it's not as bad as some other places. Core CPI was 4.4% yoy and headline inflation was 6.7% yoy in June.
From what I see, which could be wrong, I think cryptos at the moment seem to correlate more with technology stocks (like the Nasdaq).
It's true that crypto correlates with technology at the moment. The reason behind it is that I believe that big investors consider crypto as very risky and consider them on a similar basis than technoly titles. This doesn't mean however that the value of BTC for example is reflected correctly. I believe that in the long run it will be good to own crypto.
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Thank you!
Welcome back, Achim!
Regarding the rising prices... I'm quite at peace with that. I actually lived worse when communism fell in our country. Of course, I was very young then, but I remember my parents buying 'stuff' that could retain some value because hyperinflation was driving our national currency to the ground. Maybe Turkey is not that far from that experience with their national currency. The difference is now the whole world economy is affected, and there are no safe fiat currencies. Maybe the USD.
In my opinion there is no safe currency. The USD is only stronger because the interest rates are higher than for the Euro other other currencies. In order to avoid importing inflations, it's possible that the different central banks will increase interest rates so that the currency appreciates in respect to others. Such a race would have a lot of losers, like exporting businesses... At the moment it's pretty difficult to predict how things will evolve.
I believe that's why ECB doesn't want to make the EUR stronger. To avoid affecting exporters from the EU as well.
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I am not that tuned in to the economic effects of inflation on crypto. However, while there is probably some link, it doesn't appear to have a direct connection. Here in the United States, a lot of the inflation can be tracked back to the economic stresses caused by the pandemic. With product shortages caused by logistics issues and lack of appropriate personnel, prices have continued to rise. This began long before the current crypto bear market started. This leads me to believe crypto declines are more effected by fear about the inflation than the inflation itself.
I think that the drop of crypto prices is due to the fact that big investors get out of it since they can get now bonds with positive interests. Once all these big fishes are out of crypto, I definitely think that crypto will be a good way to preserve our value.
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Here in Brazil, the official inflation rate is around 10-15%, but the "real" inflation rate is way, WAY higher than that.
Fiat Inflation is attracting even more people to the "cryptoworld", specially stablecoins, as they're wanting something safe to store their purchase power. For example, Argentina is suffering an incredibly high inflation of more than 100%, and people's starting to deal directly through cryptocurrencies and ignoring their local currency...
I believe that the drop of crypto prices is related to the increase of interest rates. A lot of big investors still see crypto as very risky and prefer to buy bonds with positive interest rates. In the long run I believe that crypto will be a better protection against inflation that what it looks like at the moment.
That's, indeed, true. Cryptos are part of the financial world and, thus, it's expected for its prices to be affected by the rest of the financial ecosystem, including the overall increase in interest rates across the whole world.
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Welcome back from your vacation. It might be the opposite of what most people say, but I think inflation is going to drop and we may get some deflation soon enough. Although prices have gone up recently for everything due to the supply chain issues. I just see the demand for goods drop due to less discretionary spending and for it to affect everything. Personally, I think crypto will recover as we are in a bear market, but I don't think prices will really go up much until the bad news starts to die down.
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Everybody speaks about inflation but I kind of agree that there are signs that seem contrary to what should point to inflation. Unfortunately I believe that the bad news will be around for quite some time...
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Inflation isn't too bad here, though prices have gone up a bit on things like food and fuel... granted, fuel has actually been steadily decreasing after peaking like a month ago. I still view crypto in a Bear market as something of a mid-term investment, for the next Bull market. Not sure how inflation will directly impact crypto prices, but interested to see how that goes.
It's definitely difficult to make any predictions and I still believe that it's a good moment now to buy crypto, whatever happens in the fiat world...
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Oh wow! Achim bro, it is super cool to see you back and hear your voice again, I literally missed you, zoltan is the witness. hehe :D
We have a very bad economic situation and that mostly because of corrupt system and circulating debts, which causes an automatic inflationary phenomenon every then and now, and it is keep inflating prices of goods on exponential terms in local currency.
A year ago I bought $1 in Rs. 175 and a few days back it was Rs.250, this situation keeps grossing more and more for common people, who can't even afford a full meal for their families in these harsh economic conditions.
I fear the economy of the country might collapse like Sri Lanka if circulating debts keeps growing with their interests annually.
Crypto is indeed a very good solution to improve our economic system like El Salvador, but our financial regulatory system is hijacked by IMF and World Bank, there is no place for crypto in this modern slavery system in my country.
Thanks
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!PIZZA
Corruption is definitely the worst factor in all of it. I see so many countries where the greed of the elit is driving the nation into the crisis. It's possible to fight inflation but what can be done against such corruption?
Inflation is hitting pretty hard in the US too. I moved here from Brazil 5 years ago, and I remember gas for under U$3 a gallon, and today close to U$6. Another good comparison I like to make is using fast food. I used to be able to buy a fast food lunch for a little under U$7 when I moved, and now it is close to U$10. The past 12 months were the worse. I think the FED took a little too long to act, now we will see the economy on fire for a few months before the rates go down again. Crypto is still very speculative but in the future could become a safe place during times like this. Crypto is here to stay.
For a very long time interest rates were ridicoulously low to stimulate the economy. Now it seems that we are paying the price for it. Instead of fueling the economy it's the supply chains that reduce the offer.
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Here in Canada we feel the inflation at the grocery store and the fuel prices which have stagnated the last few weeks.As a country who doesn't rely on crypto at all as a main currency, crypto as a whole doesn't affect us.
It's nice to see that Canada isn't suffering too much from inflation
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Inflation in UK has gone up. Most of the stuff is costlier than it use to be, whether its day-to-day items, gas, electricity or fuel.
I am not sure, how crypto will behave when the inflation keeps going up.
Most of the markets are affected, crypto will also feel the affect too price wise i guess.
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When I see crypto loosing value towards the USD which sees like a 10% inflation,... then I don't really get it. We will see I guess.
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Welcome back from your vacation!
I see crypto as my hedge against inflation. Maybe it is wrong, but I don't have anything to loose. The price of Bitcoin has been coming down because there was a bunch of people liquidated over the past few weeks. I hope my HBD 20% APR will help me with beating the inflation.
!PIZZA
When I look how much fiat money has been printed lately and how much BTC there will ever bee, I also beleive that it's a safer bet to invest in BTC even if prices have come down a bit. Maybe in a couple of months we will regret that we didn't take this opportunity to buy BTC cheaply :-)
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Unfortunately inflation and the whole economy of my country makes the growth of my crypto holdings growing very slowly. But slowly and always we are growing!
I can't say anything in that regard as I don't know the situation in your "field", but your crypto holdings can be a huge saver if the economy collapses even further...
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