Breaking

Sunday, October 4, 2020

BITCOIN'S VALUE RISES FASTER DUE TO INFLATION


 

  Bitcoin's rise in recent years is due to several factors. One of them, inflation. This indirectly affects the increase in the price of Bitcoin, considering that Bitcoin is always juxtaposed and denominated in USD. The reason is that USD is a fiat currency that cannot withstand the depreciation of the currency's value.


In the decades following the economic crisis in America, inflation was even around 2% each year. Lowest score in American history. However, it does not stop there, if we calculate the US has experienced inflation of up to 20% in just the past 10 years. Of course, this is exacerbated by the current state of the world economy after the pandemic.




Inflation and Bitcoin


Reporting from the Cointelegraph data, if there is no depreciation value and returns to its 2010 value, the value of Bitcoin will be in the range of $ 8,770. That means there is a price range of $ 2,000 at the current value of Bitcoin.

On the other hand, Bitcoin's performance is not comparable to the performance of the USD in the last decade. This is because if Bitcoin was invested in 2010, its value has now jumped by more than $ 274,000. Meanwhile, the USD fell to only 84 cents.


The data above also explains that Bitcoin means that it is not completely immune to inflation (because its value is always side by side with the USD), but Bitcoin is one of the assets with the highest increase in value in history.


Even with very high inflation, the value of Bitcoin appreciation has increased very rapidly until recently. Experts feel that one way to avoid inflation that occurs in Bitcoin is to stop denominating Bitcoin with fiat. This way, maybe 10 years from now, 1 Satoshi could be equivalent to 1 USD.

No comments:

Post a Comment