Inflation vs. Deflation: The Effects on Bitcoin’s Prices

Inflation and its opposite, deflation, have an impact on the price of Bitcoin. The general increase in inflation tends to boost Bitcoin’s price. And when the inflation rate turns negative, deflation tends to drive the price of Bitcoin lower.

Due to the COVID-19 pandemic that results in an economic crisis, central banks around the world have been trying to stimulate the economy by printing more money. The world economy is in a cycle where central bankers are reluctant to remove money from the economy and have generally been adding more. As a result, the cycle of money printing has created an impact on Bitcoin’s price.

The Basics of Inflation and Deflation