With inflation in the U.S. hitting its highest mark since the 2008 financial crisis, Bitcoin is serving as a critical lifeline.
The consumer price index (CPI), a measure of the price of consumer goods and services, increased by an annual rate of 5% last month, hitting its highest mark since August 2008, according to the U.S. Bureau of Labor Statistics.
As money printing and federal economic stimulus measures continue in the wake of the COVID-19 pandemic, this measure indicates that USD inflation is at its highest mark since the Great Recession, leading to palpable concern from investors.
“Fears over rising prices in the U.S. have gripped markets, with investors fearing that pent-up demand and supply chain bottlenecks would create inflationary pressures, forcing central bankers at the Federal Reserve to slow their stimulus program,” as The Guardian reported. “Core inflation, which strips out volatile items such as food and energy, leaped to the highest level since 1992. It rose 3.8% year-on-year, up from 3% in April.”
Bitcoin, which was introduced with direct overtures to the Great Recession, is designed to solve many of the problems currently rearing their heads in the legacy financial system. The bitcoin supply is predetermined, released in a programmed way and free from manipulation by third parties, such as the Federal Reserve. As such, it cannot inflate as the dollar is currently.
Concerns about inflation drive many people to invest in bitcoin, as a way to better protect their wealth. This current economic trend appears to be setting the stage for another crisis of Great Recession proportions, something that Bitcoiners have felt coming for some time.