How does inflation affect crypto?

[owmivmen]

Can you explain why inflation has such an effect on crypto? If I see that crypto is made to fight inflation and why do crypto prices seem to be going down when it is inflation?

[Hope4life]

What happened we can see from the collapse of Luna caused by People buying UST drives the price up, and UST being burned during its exchange to luna deflates the supply. It causes inflation in Luna tokens and affects the crypto market

[mu_enrico]

Since cryptocurrencies behave like a high-risk asset, let's say like stocks, it will follow the same principle. One of which is if the Fed raises interest rate, the stock market tends to decline. This is because bank saving interest will be more appealing, since it's still risk free! Why I talk about the interest rate when the question is about inflation? Well, the Fed adjusts the interest rate based on the inflation rate, higher inflation -> higher interest.

[atjiat]

What happened we can see from the collapse of Luna caused by People buying UST drives the price up, and UST being burned during its exchange to luna deflates the supply. It causes inflation in Luna tokens and affects the crypto market

With crypto content marketing, you need to explain to potential customers the use cases of your project and how it can benefit users

[MrSpasybo]

Crypto is used to fight inflation – this idea is only made up by members of the community. Crypto was created as an alternative to fiat for payment purposes and to escape manipulation by governments.
When inflation is high, the government will take actions to tighten cash flow, investors will have less money to participate in risky markets, including crypto. The crypto bubble will lose its strength.

[Fenix]

Crypto is used to fight inflation – this idea is only made up by members of the community. Crypto was created as an alternative to fiat for payment purposes and to escape manipulation by governments.
When inflation is high, the government will take actions to tighten cash flow, investors will have less money to participate in risky markets, including crypto. The crypto bubble will lose its strength.

Regarding the fact that inflation should have a positive effect on the prices of the cryptocurrency market, so far we have only one reasoning. There has hardly been any research on this. It is logically argued that when inflation increases, people will try to protect themselves from it and will invest in cryptocurrency. The demand for it will increase and the cryptocurrency will grow in price. However, in practice, the opposite effect is also observed. An increase in inflation leads to a fall in prices in all markets, including cryptocurrency. This is because there is a direct relationship between the stock markets and the cryptocurrency market.

[owmivmen]

What happened we can see from the collapse of Luna caused by People buying UST drives the price up, and UST being burned during its exchange to luna deflates the supply. It causes inflation in Luna tokens and affects the crypto market

I mean it's like the US is currently experiencing huge inflation, even the biggest in their history. Is the dominant investor only from the US?  as you know crypto was created in addition to decentralization and as a counter attack inflation in a country. is this still the case?

[owmivmen]

Since cryptocurrencies behave like a high-risk asset, let's say like stocks, it will follow the same principle. One of which is if the Fed raises interest rate, the stock market tends to decline. This is because bank saving interest will be more appealing, since it's still risk free! Why I talk about the interest rate when the question is about inflation? Well, the Fed adjusts the interest rate based on the inflation rate, higher inflation -> higher interest.

I understand and it has something to do with the interest rates raised by the FED at this time. If the FED continues to raise interest rates will the crypto market weaken? I see US and FED control the crypto market now

[mohdelayo]

Can you explain why inflation has such an effect on crypto? If I see that crypto is made to fight inflation and why do crypto prices seem to be going down when it is inflation?

I'm my own understanding, inflation as a monetary situation causes the value of products and services to go high, thus leading to an increase in the cost of living. This kind of situation will make companies and individuals to liquidate their cryptocurrency positions in order to ease their lives, this consequently dumps the market.

[Jaephoenix]

Its simple. The people buying crypto don't have the funds to indulge in it again. Why? Prices of goods and services in the offline world have increased due to the inflation. Now since prices have spiked, people spend more and thus less would be spent on investment opportunities like stocks, crypto etc

[anshor1]

Can you explain why inflation has such an effect on crypto? If I see that crypto is made to fight inflation and why do crypto prices seem to be going down when it is inflation?

Of course inflation will affect crypto .
Many investors will hold their fund during inflation.
That's the fact.
But It's just my  analyzing, could be wrong.

[Senin]

The significant increase in inflation rates worldwide this year coincided with a bearish period in the cryptocurrency market, which has also continued throughout the current year. In any case, if the crypto-currency was, as was commonly believed, a saving refuge for people during a period of high inflation, then this year the cryptocurrency should have risen in price due to increased demand for it. However, this is not observed. Of course, other processes taking place all over the world are merging into the cryptocurrency market, but still the fact remains.

[carcas]

Can you explain why inflation has such an effect on crypto? If I see that crypto is made to fight inflation and why do crypto prices seem to be going down when it is inflation?

I think it's not inflation that affects the current market but the interest rates raised by The FED that make people prefer to invest in assets that are not risky such as preferring to save money

[Nestle]

Can you explain why inflation has such an effect on crypto? If I see that crypto is made to fight inflation and why do crypto prices seem to be going down when it is inflation?

Do you dare to buy and invest when inflation occurs? Inflation makes the price of goods rise from the normal price. people will prefer to save and use money as well as possible

[owmivmen]

Can you explain why inflation has such an effect on crypto? If I see that crypto is made to fight inflation and why do crypto prices seem to be going down when it is inflation?

I'm my own understanding, inflation as a monetary situation causes the value of products and services to go high, thus leading to an increase in the cost of living. This kind of situation will make companies and individuals to liquidate their cryptocurrency positions in order to ease their lives, this consequently dumps the market.

isn't that just like liquidating an investment? is there any other option besides liquidating the investment during inflation? I think deciding it's really hard to do now