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The Daily Hodl 2025-01-09 12:45:17

Potential New Wave of Inflation To Be Good for Bitcoin in 2025: Fidelity

A new analysis from financial services giant Fidelity suggests a new wave of inflation in 2025 could benefit Bitcoin ( BTC ). Chris Kuiper, the director of research at Fidelity Digital Assets, the firm’s crypto arm, says in a new report that “stubborn” inflation and fiscal deficits suggest it’s possible the US could enter a period of stagflation – an unfavorable economic environment dominated by stagnant economic growth, high inflation and sometimes high unemployment. Kuiper notes Bitcoin’s reaction would depend on the fiscal and monetary response to stagflation. “If fiscal and monetary institutions chose to fight the ‘stag’ part of the problem through increased spending or monetary tools, Bitcoin could potentially perform well, albeit likely with another lag. However, if controlling the ‘flation’ part becomes the higher priority and is addressed with significant reductions in the money supply, liquidity, and fiscal spending, then Bitcoin could potentially face headwinds on a relative basis.” Kuiper also notes, however, that gold rallied significantly during a second wave of inflation in the 1970s and 1980s. “While we may not know what the future holds for the macroeconomic environment for 2025, we do think Bitcoin may continue to provide benefits in a portfolio for multiple economic scenarios. If a recession does occur, it will likely be responded to with additional monetary and fiscal stimulus, which historically has been good for Bitcoin. If risk assets continue to appreciate and inflation continues to run above the 2% target, Bitcoin will also likely do well. Bitcoin will only face obstacles on a relative basis if there is a drastic cut in fiscal spending and slowing or reversing of money creation. However, in our opinion, this is the least likely scenario given the fiscal situation of high structural deficits and a highly indebted monetary system.” Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inbox Check Price Action Follow us on X , Facebook and Telegram Surf The Daily Hodl Mix Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing. Featured Image: Shutterstock/maksum iliasin/unicro The post Potential New Wave of Inflation To Be Good for Bitcoin in 2025: Fidelity appeared first on The Daily Hodl .

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