We live in an era of unprecedented economic uncertainty and the value of money is changing faster than ever before. Inflation is a big problem for many countries, especially in developing economies where it can reach extreme highs. This is known as hyperinflation, when prices for goods and services skyrocket and the value of money quickly evaporates.
However, something strange is happening during these periods of hyperinflation – Bitcoin is becoming more valuable. This is because Bitcoin is not controlled by any government or central bank and its supply is predetermined and limited. As a result, Bitcoin is seen as a safe haven asset during times of economic turmoil and its value appreciates when the value of fiat currencies depreciates.
This phenomenon is not just theory. During Venezuela’s hyperinflation crisis in 2018, the Venezuelan bolivar lost over 99% of its value while Bitcoin surged over 600%. This is why many people in developing economies are turning to Bitcoin as a way to protect their savings from being wiped out by hyperinflation.
So while hyperinflation can be devastating to the value of fiat currencies such as the US dollar, it can be a boon for Bitcoin and those who are wise enough to invest in it.
