Big Bitcoin Boom Is Coming As Inflation Predictions Enhance: Analysis

A big bitcoin boom is upcoming according to a top economist, as inflation predictions are enhancing and the fear is rising. In our latest Bitcoin news today, we take a closer look at the price analysis for the leading cryptocurrency.

The analogy came after the demand for inflation-protected bonds increase in the United States which only shows that investors expect the consumer prices to increase in the future. Bitcoin already showed higher adoption in countries that had higher inflation rates which are a narrative that prompts some to see it as an alternative to fiat currencies.

The price of Bitcoin remained trapped inside the $300 trading range over the past few weeks but the benchmark cryptocurrency could avoid these short-term setbacks and it could even rally on a more extended timeframe as it has already done most of the time. Once again, it is the fears of inflation that are caused by the central banks’ money printing that could end up making a big boom for the Bitcoin price higher. The recent data by EPFR, an agency that tracks capital flows across institutional investment portfolios, found that some investors injected more than $5 billion into funds investing in Treasury Inflation-Protected Securities in the previous four weeks. The securities protect portfolios from further inflation.

The yields on 30-year Tips are below 0.26 percent while the five and ten-year yields have crashed to levels last seen in 2012 and 2013. This marks the first time since the beginning of the COVID pandemic that investors illustrated their fears of rising consumer prices. People in the bitcoin industry have been quite vocal about the issue and they noted that the Federal Reserve’s decision to inject $2.6 trillion to aid the US economy will lead to massive inflation in the upcoming years.

Paul Tudor Jones a hedge fund manager, believes that same as he noted that young assets like Bitcoin could protect people from the aftermath when a fiat currency starts devaluing. He allocated more than 3 percent of his $22 billion portfolios into the cryptocurrency. The chief economist at TS Lombard believes the inflation spike will happen when the US economy recovers from the lockdown caused by the Coronavirus. The Federal Reserve’s stimulus program and the increase in government spending could push the Tips prices:

 “I do not expect inflation for the next 12-18 months. After that, I could see the economy having a higher inflation bias.”