The situation in the crypto market is quite rocky, but it looks more stable than what is happening in the stock market right now. While many laymen believe that the strengthening US dollar is something that counteracts inflation, it is not accurate and many investors are already looking into opportunities to invest in Bitcoin to hedge against inflation.
For example, Fidelity Investments, BlackRock, and JPMorgan Chase all have new products that are focused only on BTC. Many fund managers are moving their assets to the crypto sector amidst global uncertainty.
What is happening to the US economy?
Dow Jones has been tanking for quite a while now. NASDAQ and S&P 500 are also in very bad shape losing up to 4% daily. With the US dollar strengthening its position against Euro, Chinese Yuan, and British Pound, it should be strange that the national economy is in shambles. However, the same happened in 2008 when the Fed had to raise interest rates to battle inflation causing the US dollar to be more attractive to foreign investors.
However, it also makes it harder to sell domestically produced goods to foreign markets creating a situation where all businesses in the US are preparing to report lower earnings making them less attractive to investors. Inflation may be held back in the short term, but the distant perspective looks very grim.
The Eurozone’s inflation was over 9% on average. It is still going up. If more people start investing in US-issued debt, European countries will have to raise interest rates as well slowing their economies and creating a perfect environment for a huge collapse. If it all comes true in the nearest future, we will see a massive crash in the US stock market.
Bitcoin is looking like a very sound investment
Cryptocurrencies are supposed to be hedges against inflation. The last month showed that Bitcoin and Ethereum can be more stable than Dow Jones allowing experts to speculate about the direction many investors will take their capital to. Bitcoin and Ethereum are looking like strong competitors to gold and real estate.