INFLATION RATE: BITCOIN VS FIAT CURRENCIES

Apr 08,2019 at 11:13 pm




Inflation is a sustained increase in the general price level of goods and services in an economy over a period of time. It’s an economics term that means you have to spend more to fill your gas tank, buy a gallon of milk, or get a haircut. Inflation increases your cost of living. 

What Causes the Inflation?

There are two main causes of inflation. The first occurs when demand-pull conditions drive widespread price increases. The second cause of inflation results from cost-push factors. When the total money in an economy (the money supply) increases too rapidly, the quality of the money (the currency value) often decreases. Inflation reduces the purchasing power of each unit of currency. U.S. inflation has reduced the value of the dollar. Compare the dollar’s value today with that in the past. 

Below we will serve the inflation rates of the United States, India, Venezuela, and Bitcoin.

United States – 1.6%


Inflation Rate in the United Statesaveraged 3.27 percent from 1914 until 2019, reaching an all timehigh of 23.70 percent in June of 1920 and a record low of -15.80 percent in June of 1921.

India – 2%


Inflation Rate in India averaged 6.27 percent from 2012 until 2019, reaching an all-time high of 12.17 percent in November of 2013 and a record low of 1.54 percent in June of 2017.

Venezuela – 2 688 670%


Inflation Rate in Venezuelaaveraged 13960.36 percent from 1973 until 2019, reaching an all-time high of 2688670 percent in January of 2019 and a record low of 3.22 percent in February of 1973.

Bitcoin – 0.01%


The current Bitcoin inflation rate is 0.01 percent. The all-time high rate was in January 2014 when it reached 0.038 percent. In December of 1992 and a record low of 0.009 percent in December of 2018.


The data above shows that Bitcoin inflation rate is 160 times lower than in the United States and 200 times lower than in India, 268 867 000 times lower than in Venezuela.

In conclusion, cryptocurrencies, like Bitcoin, might be a considerable means to avoid the high inflation rate in our daily lives. Cryptocurrencies have fixed number of coins issued into the markets which means that there is no possibility to issue more coins into the supply. Bitcoin has a fixed supply of 21 000 000 BTC and ‘printing more Bitcoins’ will never happen. This makes the asset even more attractive store of value. 


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