Inflation could be considered one of the leading financial aspects that have influenced the valuation of Bitcoin and many other traditional assets.

Inflation and recession are the concepts that have caused the most significant impact on the price of Bitcoin, which is why the decisions made worldwide about these elements will affect the valuation and capitalization of cryptocurrencies.

Digital assets are linked to the circulation of money; with more free available money, people need to invest or want to multiply the capital that is not subject to any deduction, considering a level of investment risk as part of the process. Enter BitQS for more information.

Does a rate hike generate an uptrend?

The Federal Reserve is currently developing strategies to make a soft landing that will stabilize the economy and generate an economic scenario more suitable for any investment. Still, while this is happening, the effects at the level of digital assets have been devastating for many investors.

We are facing a new decision regarding interest rates by the United States Federal Reserve where only 0.75% will be increased, news that has caused a different impact on cryptocurrencies.

Bitcoin increased its value by more than 7%, a deal almost reaching the maximum downtrend level. Still, even so, it has not had a relevant effect that allows a change in trend.

This rebound has not been something extraordinary, only that after staying down, all those who have deposited their money in cryptocurrencies expect a change in trend that will allow them to obtain profits that justify the decrease in their price so far in 2022.

It is difficult to establish a determining position about the change in the trend of Bitcoin because many factors influence this, without leaving aside that the periods in which a change in direction is still not culminated according to the previous phases of Bitcoin.

We could face a dilemma of political and economic ideals where everyone usually sees what suits them. Therefore, one must be very sure of the global analysis to determine the ideal time to enter the crypto market.

Why is the price of Bitcoin increasing?

Many of the results generated by the statistical analysis of the indicators that demonstrate the state of an economy allow determining the valuation of a particular asset and its position in society.

Bitcoin has strengthened even in a complicated inflationary stage since many people consider that as Bitcoin has recovered on other occasions, it may not reach the price many analysts established last year based on 100,000 dollars.

Individuals and corporate investors find savings potential in Bitcoin, which is why bearish phases are also usually taken advantage of since the price is more accessible and thus can benefit from a change in trend.

Economic data is the best bullish indicator.

The economy is going through a phase in which the pressures produced by inflation are beginning to recede. These are the best indicators to assess with a cool head what could be happening in the economic environment.

The exciting thing is that digital assets, like traditional ones, are waiting for indicators such as the GDP of the United States to determine if the country is in a recession, which would affect the valuation of cryptocurrencies in such a way that more would be known soon if we are still in crypto winter.

The change in the trend of cryptocurrencies is waiting for the economic stability of the world powers, determining from these the price and its possible upward change.

Bitcoin and inflation do not get along as a result that high inflation producing an increase in rates that, according to the Fed, is the solution to reduce the value of this index. Still, this response significantly affects the price, supply, and demand of cryptocurrencies.

It is necessary to wait a reasonable time for the supply chain to stabilize because excessive liquidity does not allow inflation to decrease. Moreover, it generates an even more complicated scenario between the geopolitical problems between Ukraine and Russia and Covid-19.


The evolution of Bitcoin and cryptocurrencies must be subject to the fulfillment of their phases since they are decentralized financial instruments; of course, a much more stable and healthier economic and financial scenario for the parties would contribute to the change in the trend of Bitcoin.



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