At a time when most central banks in the world are "printing fresh money” and "pumping" it into the system to provide the necessary liquidity due to the crisis caused by the Covid-19 pandemic, it is expected that more money will lead to a decline in its relative value.

In October inflation in the United States reached its highest level of the last three decades. An increase in prices was recorded for both basic foodstuffs and luxury goods. The reason for this situation, in addition to "pumping" money, can be a constant lack of supply and high demand.

The US Secretariat of Labor announced that the consumer price index (CPI) for October, which measures how much consumers pay for goods and services, increased by 6.2% compared to last year. It was the fastest 12-month growth since 1990 and the fifth month in a row with inflation above 5%.

This means that if the inflation of 6.2% was at this level for the past 10 years, the sum of $100,000 in 2011 would be worth only $54,800 in 2021.

This situation spreads concerns and burdens investors, forcing them to look for ways to preserve the value of their money. The traditional way of protection against inflation is to invest in gold, but in modern business conditions, other assets have taken over. Cryptocurrencies can be considered as one of the most popular financial instruments, with Bitcoin leading the way.

Bitcoin as a value keeper

Cryptocurrency owners are in a unique position and benefit from these latest developments or at least gain refuge from them. Namely, the decline in the value of fiat currencies, such as the dollar, has highlighted the dominance of Bitcoin and other altcoins when it comes to hedging against inflation.

Bitcoin has broken another record and is on the verge of reaching $ 69,000 for the first time after inflation data prompted arguments about Bitcoin as a custodian of value.

The largest cryptocurrency by market value rose by as much as 1.9% to $68,991 on Wednesday (10.11.2021), surpassing the previous maximum set at the beginning of the week in New York.

According to Bitcoin Stimulus, Americans who invested in Bitcoin the $1,200 check that they received as part of a state support program in April 2020, now have a Bitcoin worth $12,172 - an increase of 914%.

Crypto supporters claim that, unlike the dollar or any other traditional currency, the digital coin is designed to have a limited supply, so it cannot be devalued by the government or the central bank such as in the case of the classic paper money. That's why Bitcoin and other cryptocurrencies could be the perfect custodians of the value of money in times of economic uncertainty.