Leading cryptocurrency which is Bitcoin Is deemed to be a hedge towards inflation primarily because of the reason that its supply has a ceiling of 21 million while its monetary policy is predesigned to reduce the expansion supply by 50% every 4 years. Because of this, any deflationary collapse of the cryptocurrency might be seen as price-bearish development.

At times of deflation, cash is mostly the king due to the drop in general price level is boosting the purchasing power of monetary unit or its ability to buy services and goods. According to Erick Pinos, in comparison to inflation, when people are trying to get the most of their money due to its losing value, during deflation, people become more comfortable with the fiat currency because the value is going up.

Growing Steadily

The rush for cash on the other hand might not have negatively impacted Bitcoin’s prices. This is because deflation will boost the buying power of crypto. As a matter of fact, the rise in purchasing power draws bigger demand for Bitcoin since crypto is being used already as a mode of payment.

Actually, it isn’t strange for there are countless of businesses, merchants and brands that are accepting Bitcoin as payment and many more are beginning to realize the benefits associated to crypto and by diversifying revenue streams.

Not just that, cryptocurrency has great appeal as being a medium of exchange and will most likely keep its trend. Thanks to the continuous growth of technology especially at these times of pandemic. Well, aside from the fact that Bitcoin and other digital currency is being used as a mode of payment, you can see it as well in the financial market. In fact, many people are trading cryptocurrency and using several indicators such as mt4 indicators to gauge where the trend will go and make more money from it.

Digital Gold

From the time of its invented and introduced to the public, Bitcoin has been named as “digital gold”. Much like actual gold, cryptocurrency is divisible, fungible, durable, recognizable and scarce. Both assets do share the same features which are being functional and practical. Bitcoin though has an actual utility as a mode of payment; something that gold is lacking of.

In fact, both the Federal Reserve and the US government released an enormous amount of liquidity in the system for the past several weeks in an effort to contain the fallout from Covid-19 outbreak. Thing is, many of the central banks and governments are having a hard time keeping up with it. Hence, if the virus never stops, it might result to several corporations going to default, investors might have lose trust in using traditional finance and seek for alternative similar to cryptocurrencies and Bitcoin.