Does Inflation Determine The Price Of Bitcoins: What You Need To Know

Published on: 07 October 2021 Last Updated on: 30 July 2024

2021 has seen a spike in Bitcoin trading. Unlike investing in traditional currencies, Bitcoin is not issued by the central bank or backed by any governmental organizations.

Therefore, the monetary policies and economic growth measurement that typically affect the price evaluation of the fiat currencies don’t affect Bitcoin.

So, if the price of Bitcoin is not affected by the traditional elements, what affects the price of Bitcoin? This is what we will discuss in this article.

Does Inflation Determine The Price Of Bitcoins?

Crypto investors often discuss Bitcoin being a hedge against inflation; why?

The argument starts with the fact that the process of central bank money printing will eventually lead to the decrease of the value of money over time. But, on the other hand, Bitcoin has no connection with limitless printing.

There are a total of almost 21 million Bitcoin that will end up in the market when the reward for Bitcoin Mining reaches Zero. This limited supply allows Bitcoin to resist inflation.

Initially, the concept was only in the papers, but it became a proven fact after the pandemic. When the pandemic hit the global finance market, the government hoped for an expansionary monetary policy, whereby central banks started printing money to make the market stable.

The crazy amount of money printed during the first twelve months of the pandemic increased the inflation rate. Despite the value of the currency depreciating, the price of Bitcoin keeps on rising, reaching an all-time high of more than $63,000.

This further solidifies the argument that inflation does not affect Bitcoin’s Prices.

What Affects Bitcoin’s Prices?

After our conclusion to the argument, one thing is certain: inflation plays no role in influencing Bitcoin’s prices. So then, what factors stimulate Bitcoin’s prices?

The answer may surprise the investors because of what’s not included: Bitcoin Mining.

1. Demand & Supply

Demand and Supply are one of the main factors that affect Bitcoin’s price. The higher the demand and the lower the supply, the higher the price.

As we have talked about earlier, unlike the unlimited supply of fiat currencies, Bitcoin is limited. Moreover, over time it gradually slows down. For this reason, there is a possibility that the demand for Bitcoin will increase in the future.

Of course, the demand of every Cryptocurrency will vary, but that will depend on several other macro factors.

If you are an investor and looking for an opportunity to invest in Bitcoin, the bitcoin equaliser platform might be a better choice. They have experts sitting on the other side of the platform helping new investors understand the new roads of investment.

2. Power Of Media

Information regulation also affects Bitcoin’s price. The way the media writes about Cryptocurrencies largely affects the demand curve. If the media talks about the good aspects of Bitcoin, the demand rises, while bad news can cause panic, reducing Bitcoin’s price.

3. Financial Crisis

The economic situation of the countries also determines the price in that country. If the traditional financial system starts to collapse, people start looking for other assets to safeguard their money’s monetary value. Therefore, the crisis has a close relationship with the economic status of the nations.

4. Rules & Regulation

Another important factor that can be considered equivalent to the demand and supply is the rule and regulation of Bitcoin. Every nation has different rules and regulations that you need to fulfill while trading in Bitcoin or other Cryptocurrencies.

When the rules become quite restrictive to take the repression, the price of Bitcoin falls. But, on the other hand, if the rules are friendly to the industry, it acts as a catalyst for a strong price increase.

The Bottom Line

The factors we have talked about are just the most important ones. There are other factors as well which support the price fluctuation. Therefore, all the investors who are looking to invest in Cryptocurrencies must analyze all the factors. Knowing the factors will help you avoid unwanted risks and increase the chances of profit.

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Mashum Mollah

Mashum Mollah is the feature writer of Search Engine Magazine and an SEO Analyst at Real Wealth Business. Over the last 3 years, He has successfully developed and implemented online marketing, SEO, and conversion campaigns for 50+ businesses of all sizes. He is the co-founder of Social Media Magazine.

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Did You Know NOT ALL DEATH are Covered by Term Life Insurance?

When you think about life insurance, you think about the financial security it will provide your family when you die. What most people don’t know is that life insurances do not cover every type of death. Term life insurance is the most common and affordable type of life insurance policy. Term life insurances specific number of years before the policy expires. You then have the option of renewing it. If you die during the term, however, your insurance will provide death benefits to your beneficiary. You should know that life insurance policies have some coverage exceptions. Particularly when it comes to the type of death. This is an important consideration as you purchase a life insurance policy, or if you are continuing to manage one. Deaths Not Covered by Term Life Insurance There are certain reasons why your term life insurance won’t payout upon your death. These coverage exceptions can be a hassle for beneficiaries and loved ones. Especially those who rely on your life insurance to cover medical, funeral, or burial expenses. Deaths which might not have coverage through insurance. Fraudulent Deaths If you commit life insurance fraud or someone lies about the cause of death, your life insurance company may refuse to pay death benefits. It is important, to be honest, and forthcoming when applying for life insurance. Especially if you have any medical conditions or dangerous conditions you are in. Dangerous Hobby-Related Deaths If your lifestyle is dangerous or you have dangerous hobbies, these activities may affect your life insurance. For example, certain pilots must opt-in for special aviation coverage to get life insurance. If someone dies in a flying accident, beneficiaries will not get death benefits. If you regularly engage in dangerous hobbies like– bungee jumping, scuba diving, or free-climbing – you need to inform your insurance agent or carrier upfront. You may need to list these hobbies or opt for additional coverage. You may also have a higher premium. Be honest, even if it does mean a higher premium. As noted previously, if you lie on your application or about the cause of death, your beneficiaries are the ones who will suffer. Murder If one of your beneficiaries murders you with the intent of collecting your insurance money, they won’t prevail. The Slayer statute prohibits death benefits from being paid out to anyone who murders or is tied to the murder of the insured. If this happens, death benefits will be distributed to your contingent beneficiaries or your estate. Suicide Most life insurance policies have a “suicide clause”. This clause states that if you commit suicide during the first two years the policy is active, then the policy will not cover the death or pay death benefits. This is designed to prevent individuals from obtaining a policy and then immediately committing suicide. If the death is possibly suicide, such as a drug overdose, then the insurance company may deny coverage. They will have to prove that the insured committed suicide (the death was deliberate) and not the result of an accident. Make Sure You Understand Your Life Insurance Policy As you can see, there are a variety of situations that could result in your life insurance refusing to pay death benefits to your loved ones. You should talk to you insurance agent to find out specifically what is and is not covered by your term life insurance policy. Make sure your insurance agent is up to date on any medical conditions you have or any changes in your hobbies or occupation. Doing so can help prevent your loved ones from experiencing the unfortunate scenario that is a life insurance coverage denial. Common Misunderstandings About Life Insurance Exclusions It's easy to assume that your loved ones are fully covered once you have a life insurance. Are they? 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You might be having second thoughts on whether or not to get an equity release loan. On the one hand, you want to use the money for a significant transaction. On the other hand, you are afraid that the interest rate will be too high over the years, and it could result in the drastic reduction of your property's value. If it is your only property, and you have nothing else to leave your children, you want them to enjoy its full value. How to make a decision It is understandable if you are having a hard time choosing. To help you decide, think about where you wish to use your money. If you are paying hospital bills and other emergency expenses, and you have no other choice, proceed with your plan. It is reasonable for you to take it. You are also making the right move if you intend to use the money for home improvements. You will be staying in your property until you die, so it does not hurt to invest in home improvements. Besides, it could help boost the value of your property. On the other hand, if you are thinking of using the money to invest or start a business, it is a bad idea. You are at an age where you can’t wait to see where your money goes, or if it will someday grow. You need to enjoy your money at this point since you worked hard your entire life. It is also reasonable to use the money if you wish to travel the world. It might not be reasonable if you were young, but at this age, do whatever you want to satisfy your desires. You might not have this opportunity someday, so while you still have it, make the most of it. Check the details Aside from how you want to use the money you borrow, you also need to check if the terms and conditions are fair enough. There are equity release schemes that are reasonable, while others seem to take advantage of your age. You can seek help from a consultant to tell you the details you don't understand. The information online might not be good enough for you to make a sound decision in the end. Look at the repayment scheme, and if there is a fee if you complete the payment earlier. You also need to look at the steps involved once you die, and your family needs to pay back the loan. If it is too difficult for them, and you think they will not receive a significant amount, you might as well look for other options. Should you get one? After consultation and research, you can decide whether or not you will take the loan. You already have the necessary information at this point to choose. When choosing, think not only of what you need now but in the long run. Think of how it will affect your family, but it does no harm to be selfish and think about its impact on you. Read Also: Lining Up For A Loan – How To Secure A Good Loan Benefits Of NBFC Business Loans Title Loan Requirements: What You Do And Don’t Need

Does Inflation Determine The Price Of Bitcoins: What You Need To Know

Does Inflation Determine The Price Of Bitcoins?