What Stagflation Could Mean For Crypto Markets

Crypto markets have undoubtedly gained significant momentum in the last decade owing to millions of new users entering into this volatile yet Bitcoin Regulations industry. It has gone through some of the toughest times and emerged triumphant, with millions of transactions being carried out successfully on a daily basis. However, the challenges for the industry have just begun to emerge from all ends. If you are one of those speculators who thought Inflation is the last thing that this industry would want, then you might want to reconsider. It is certainly not the worst adversity when stagflation shows up in the picture. 

The last time when this term became a household phenomenon was way back in the 1970s. It is one of the most acute situations that an economy goes through when inflation surges way above the anticipated scale. Moreover, the unemployment rate surges significantly in such conditions that prove detrimental to the overall economy. There is usually little to no scope of economic growth under such circumstances.It will dive deep into this critical situation and will assess what crypto markets can learn from such a massive plague. 

Looming Threat 

The renowned analysts & economists have warned the markets to brace themselves for an unprecedented time as the chances of the next stagflation occur are constantly brewing. Bitcoin is usually viewed as the most convenient hedge to face inflation, and many investors of digital assets highly favor this concept. However, there are still many watchful users who remain skeptical as the fall in prices can usher in a swarm of unfortunate events. Stagflation is no good for the crypto market & the economies alike as they only wreak havoc whenever & wherever they strike. 

War comes at a cost 

Analysts see it as an omen to far worse events that can debilitate one’s ability to trade & invest, which is not a very pleasant scenario. The emerging tensions continue to pervade the entire digital ecosystem of Eastern Europe, and the overall oil prices continue to surge. This came right after the attack perpetrated by Russia on Ukraine. The prices of other intrinsic products are pegged to surge as well, keeping in mind the escalated situation in both countries. The recent attack has debilitated any potential chance of growth in the countries. The recent crash of crypto markets right after the military attack was just a precursor to what comes next, which will be even more frightening & appalling. 

Grim situation triggered by the war

Needless to say that there exists a direct relationship between NASDAQ & crypto. Stagflation cannot be denied at this critical stage, especially during the war between Russia & Ukraine. Crypto markets can only anticipate the worst to come as stagflation is inevitable at this point, and the damage will be too detrimental to imagine. There was little stability in the crypto markets before the war, but as it gained little traction, the war crippled all hopes of building a robust digital ecosystem. Millions have been affected by this gruesome war, and it was quite evident as the markets crashed and tumbled down like a house of cards.  

Policies to look forward to 

The subsequent demand for U.S dollars, treasury bonds, consumer staples, gold & real estate is believed to grow significantly in the forthcoming months. Stagflation is a formidable challenge that can be averted with precise measures & implementation of effective policies. Countries can look forward to robust means and judicious implications to avert the imminent stigma of stagflation that can ruin any hopes for the crypto market to re-establish itself.  

Conclusion

Stagflation cripples the ability to generate profits which is why such profit margins get affected by it the most. They start declining until they die down completely, and it has been witnessed in the past as well. Crypto markets can only wait & watch what this recent war brings for them. Will there be more dilapidation of the market, or the hopes of building a robust market will continue to last? Needless to say that the overall demand for all the defensive assets is going to increase manifolds in the coming days due to a direct result of stagflation.