Inflation: Crypto is the Workaround for High Prices and Devalued Currency

2 mins
26 July 2022, 00:32 GMT+0000
Updated by Nicole Buckler
26 July 2022, 00:34 GMT+0000

Inflation isn’t fun for the average person. Even though we are going through a complex economic moment, there are some ways you can use cryptocurrencies to beat inflation.

Currently, different markets at an international level are in decline. One of the economic consequences of the current crisis is inflation. In other words, the increase of prices in goods and services in a given period of time.

As we well know, inflation generates a strong loss of economic capacity for traditional users. Different countries and regions such as the USA, UAE, Europe and Asia among others are expecting even higher levels of inflation in the coming months.

So how do we get around this?

The crypto market has provided high returns from the beginning of the pandemic until 2021. But could cryptocurrencies be a possible solution to the international inflationary problem?

Inflation solutions

The crypto market could effectively provide two potential solutions to inflation. This is in contrast to the traditional economic system.

The first is a deflationary economic model based on the BTC emission system. (Emission means the creation and release of cryptocurrencies.)

And secondly, an answer could be seen in stable virtual assets or stablecoins.

A deflationary emission model based on Bitcoin

Bitcoin is a deflationary emission system model. This is unlike traditional emission systems that are regulated by centralized monetary systems also known as central banks. In contrast, the Bitcoin issuance model is a decentralized monetary issuance system.

While the amount of fiat money emission increases infinitely, the BTC emission system is an emission system with a fixed emission maximum.

Inflation: Using Cryptocurrencies to Get Around Inflation

Virtual assets or stablecoins

When the user decides to save in currencies such as the Dollar or the Yuan, they are creating a store of value. Yet, thanks to central banks printing more money – quantitative easing – to “solve” economic problems. So saving in foreign currency is not a good idea. Thanks to quantitative easing, fiat currencies can depreciate in value.

The crypto market offers the possibility of saving in stablecoins. Stablecoins are virtual assets that usually have a direct backing against a real asset such as the Dollar or gold.

Inflation: Find better assets

There are different markets and options so that the user can find well-known stablecoins and be able to beat inflation.

Paxful is one such exchange. Users can access stablecoins through their peer-to-peer system. Phemex is another example: it has a community of more than 2 million users. These users can find more than 250 different types of cryptocurrencies within the exchange. Binance is the biggest exchange across the world it has more than 22 million users internationally.

Users of these exchanges will be able to find different stablecoins, altcoins and also have the chance to invest on their Launchpool.

A launchpool allows users to deposit tokens into a pool of funds. They can then farm (or earn) new ones at no cost.

You don’t have to sit back and watch your savings slowly lose value in a bank account. Get yourself on a cryptocurrency exchange, and do some research about how you could get around inflation.

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The information provided in independent research represents the author’s view and does not constitute investment, trading, or financial advice. BeInCrypto doesn’t recommend buying, selling, trading, holding, or investing in any cryptocurrencies