Can Inflation Hurt Crypto?

As cryptocurrencies fell flat on Thursday night into Friday morning, the global market cap rose more than half a percent, leaving investors confused and concerned over inflation and coming interest rate hikes. Bond yields have been falling across the world while Bitcoin has consolidated under $40,000. Short-term U.S. bond yields are rising in 2022 as interest rate hikes should be coming, but the Federal Reserve has put off that change until at least March. Monger-maturity papers are not seeing yields rise as quickly, and that indicates that the yield curve is actually flattening. 2-year treasury bonds are up to 1.16%, rising over 60% from December 2021 while 10-year benchmark bond yields are up to nearly 2%, up 20% since December. Meanwhile, popular cryptocurrencies are not performing well at all with Bitcoin up only half. percent in the last 24 hours, Ethereum down over 1%, and Dogecoin down half a percent. On the other hand, Quant was up 22%, Juno rose almost 20% and Cosmos rose more than 13%. It’s not all bad, though, according to Edward Moya of OANDA, “Bitcoin is forming a base and considering the selloff in tech stocks, crypto investors should be feeling a bit more optimistic that the bottom is in place.” At press time, Bitcoin sat just under $38,000 on falling volume and a rising market cap.