Cryptocurrencies can play an important role during inflation and the use of stablecoins like BUSD as a stable hedge against inflation.
- Cryptocurrencies often experience sudden price movements that make them an unattractive store of value. But, stablecoins such as BUSD are different and more beneficial in hyperinflationary countries.
- Bitcoin is critically a deflationary asset that is why people of nations with unstable fiat currencies are increasingly adopting it as a store of value to protect against hyperinflation and rising costs.
- People of hyperinflationary economies regularly have to deal with a volatile fiat currency. Stablecoins act as an effective alternative as more merchants and stores start adopting crypto as a payment method.
- Even though inflation remained stable over the last year, it is projected to rise in the near future as spending increases and economies rebound.
Companies and individual investors invest in gold, real estate, and other assets to protect themselves from future inflation. Recently, Bitcoin and cryptocurrencies have shown that they too play a role during inflationary periods.
BNB USD down -0.97%
Source: Binance