Back

Inflation fears drive crypto values to record highs

Just when it could easily have been considered that Bitcoin values had arrived at their peak over the past few weeks after some remarkable rallies, the apparent invincibility of the leading cryptocurrencies has been demonstrated once again.

In the traditional financial markets, and among world business leaders and politicians, the possibility of high levels of inflation have been discussed at great detail, and many analysts at Tier 1 banks are beginning to look closely at what may happen to the global economy if the levels of inflation rise to the extent that is being predicted.

In the past, there has been no credible method of avoiding inflation, and hedging against it has been limited to investing in physical assets such as gold.

Had these global conditions occurred even as recently as seven or eight years ago, even the cryptocurrency ecosystem would perhaps not have been developed enough to be viewed by so many as a credible means of escaping a potentially inflationary mainstream financial system, however today things are totally different.

Both Bitcoin and Ethereum have reached record highs, with Bitcoin having broken through the $68,000 barrier with some analysts even having proffered an opinion that it may increase in value even further in the next few weeks.

Ethereum reached a high point yesterday (November 8) and has only tailed off slightly today with a 0.43% drop compared to yesterday’s high, however it is still very much a high point, with its record high of $4837 having been achieved this week.

There are a number of analysts and commentators who consider this to have been a result of savvy investors heading into the cryptocurrency market, and whales increasing their accumulation of crypto assets in order to sidestep any potentially harmful inflation that is looking very likely across many Western nations.

It is becoming ever clearer that the younger generation, perhaps the Generation Z demographic of young adults, view cryptocurrencies as a preferable investible asset or store of value than gold.

Gold prices have decreased during 2021, whereas cryptocurrency has been extremely volatile but has not only attracted the attention of many shrewd investors during the periods at which its price was down – notably during the aftermath of Elon Musk’s infamous tweet in May this year – but has recovered on the strength of US government advice on the future regulation and tax treatment of cryptocurrencies which cements them as part of an extremely valuable global asset base in the future.

Once again, the predictions of high values by very high profile market analysts from within Tier 1 institutions are coming into the fray.

This morning JP Morgan’s analysts gave an opinion that Bitcoin could go over $145,000 but in this analysis they did not specify a timescale.

This echoes calls from other Tier 1 bank analysts that have over the course of the various rallies that dominated the summer of 2021 that Bitcoin may go over $150,000.

With Ethereum looking set to take the slot as the most advanced topography that underpins the DeFi ecosystem for lending, smart contracts and investing outside the mainstream system, there are high hopes for the values of Ethereum too.

Perhaps we are entering the age of not only inflation-beating alternative economics, but also an entire decentralized financial system that means that all of the functions of contracts and financial transactions as well as a store of value is upon us.

The future is crypto.