What if, what you know about Bitcoin is not true? 😱 In this article, we're going to tell the real story behind Bitcoin and inflation. Read the real story 👇
, the broad money supply. This includes the currency in circulation, the deposits at commercial banks and the general account of the Treasury at the Federal Reserve . M2 has grown over the years.is what is commonly understood as inflation — rising prices. Monetary inflation can lead to consumer price inflation,In simplified terms, consumer price inflation occurs when the supply of important goods is scarce and/or there is a lot of sudden monetary inflation.
Because following the Great Financial Crisis in 2008, there was massive monetary inflation, massive asset price inflation but not too much consumer price inflation. In other words, all the new money pushed asset prices up, but food and fuel didn't change all that much.For Bitcoin, this was great. It went from zero to a high five-figure valuation at its peak. As we will see in the last section, both of these factors are now changing.for years. However, inflation wasn't all that high.
If there is a lot of labor and/or a lot of cheap commodities, consumer prices don't immediately follow monetary inflation. From 2008 till 2020, we had mostly asset price inflation and less consumer price inflation. This is reversing.BTC and inflation do not have much of a correlation. If anything, the recent past has shown they are inversely correlated:. Ever since, inflation has printed multi-decade records, and BTC has been clinging on to its previous cycle top..
. Instead, it's the proverbial money printer at the Fed and the willingness of commercial banks to expand credit. Bitcoin is a
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