Inflation has once again taken center stage in the U.S. economy, reviving concerns about its impact on financial markets.
In a context of extremely lax economic conditions, eyes are on how this phenomenon could redefine investment strategies and the role of assets like bitcoin (BTC).
According to “The Kobeissi Letter,” a newsletter that provides analysis on markets including stocks, commodities and options, the United States is currently experiencing one of the “most flexible” financial conditions in the past two decades.
By “flexible financial conditions” he refers to a combination of factors such as low interest rates, high liquidity in the markets, and easy access to credit. However, the bulletin warns that this It also fuels inflationary and asset bubble risks..
In fact, current conditions are even more favorable than during the period of ultra-expansive monetary policies applied in 2020 and 2021 in response to the pandemic, the report highlights.
This has led the market to anticipate an additional 25 basis point cut in interest rates at next December’s meeting and four more quarter-point cuts in 2025. These forecasts are subject to change, depending on how the economy evolves.
Last September, the agency implemented the first rate cut, in more than four years since March 2020, which cuts off the agency’s prolonged aggressive monetary policyas reported by NoticiasVE.
However, Fed Chairman Jerome Powell signaled that he is not necessarily inclined to cut rates. “The economy is not sending signals that we need to rush to lower rates.”
A worrying fact
However, There is a worrying fact. It deals with underlying inflationwhich excludes volatile food and energy prices, has remained above 3% for 43 consecutive months, as can be seen in the following graph.
This indicator reflects persistent inflationary pressureswhich suggests that maintaining such flexible financial conditions could be an unsustainable strategy in the medium and long term.
Bitcoin on the radar: a tool against inflation
In this scenario, bitcoin emerges as a potential haven of value against the erosion caused by inflation.
Its decentralized nature and limited supply of 21 million coins make it a scarce asset that It cannot be manipulated by expansive monetary policies or inorganic issuance of money.as is the case with fiat currencies.
The digital currency is presented as a viable alternative for investors seeking to protect their savings from the negative effects of inflation.
In a context of inflationary crisis, confidence in traditional currencies could further erode if Fed policies persist in prioritizing economic stimulation at the expense of controlling inflationary pressures.
On the other hand, high inflation can drive demand for alternative assets, and bitcoin is positioned as one of the most prominent.
Furthermore, a financial environment like the current one, with negative real interest rates, decreases incentives to hold cash or traditional bonds, favoring bitcoin as a more solid alternative.
Risks and opportunities
Although bitcoin is not exempt from volatility, due to its characteristics, In an environment of high inflation, it proves to be a strategic bet for those seeking to diversify and protect their wealth..
In times of hyperinflation such as those experienced in countries like Venezuela, bitcoin shows a contrast between a money independent of governments and central banks and one that completely depends on them. The other money, national currencies such as the dollar, the euro or the bolivar, depends entirely on each government.
As the United States faces this new inflationary landscape, The crypto asset could capitalize on its safe haven image and consolidate its relevance in global markets.
The question is not whether bitcoin can play a relevant role in this environment, but to what extent trust in traditional currencies will push more people and entities towards decentralized assets like the one created by Satoshi Nakamoto.