A prominent economist warned of the start of the longest inflationary period in the last 30 years. This transition has the potential to radically change the global economy and financial markets.
Historically, periods of rising inflation have favored bitcoin ($BTC ). Its limited supply makes it a digital equivalent of 'hard' assets like gold. Speculative demand increases as investors seek protection from the devaluation of fiat.
New bull market
Henrik Zeberg, chief macroeconomist at Swissblock, analyzed the dynamics of 10-year US Treasury yields over the past 100 years. His chart revealed the emergence of a new inflationary regime—the first in 30 years. A 'rounded bottom' in bond yields is a classic signal of a transition to inflation.
"This does not mean instant inflation (quite the opposite). But the coming decade will be radically different from the previous 30 years," Zeberg emphasized.
According to the expert, a deflationary collapse is possible before a sustained price increase in 2025. It will force the US Federal Reserve (Fed) to launch the printing press, which could trigger a prolonged bull market.
Popular crypto-analyst Michael van de Poppe also noted that the collapse of the bond market will force central banks to print trillions. This will lead to a debt bubble and subsequent deflation. The expert shared advice on what investors should do in such a situation:
"What is the way out of this situation? Maximize the upcoming years by investing in risky assets: cryptocurrencies, altcoins, and bitcoin," he said.
In anticipation of the expected collapse of the financial market, Van de Poppe recommends transferring profits from risky to safer assets, such as commodities, bitcoin (as a store of value), or fiat. The expert described this cyclical strategy as the 'best course of action' in times of economic turbulence.
Bitcoin as a hedge against inflation
As the global economy prepares for rising inflation, bitcoin is increasingly attracting the attention of investors who view the cryptocurrency as a reliable hedge against risks. This was stated by Jeff Kendrick, head of the digital asset research department at Standard Chartered.
Inflationary fears have already impacted the financial market. Last week, the largest cryptocurrency by market capitalization reached a historic high, rising above $110,900. As noted by Ryan Lee, chief analyst at Bitget Research, several factors contributed to the rise of bitcoin:
increased demand from institutional investors;
more friendly regulation;
deficit after the halving (reduction of emissions to 450 BTC per day).
"Macroeconomic conditions play a role. Expectations of rate cuts and persistent inflation enhance the appeal of bitcoin as a defensive asset, and many view $113,000 as a realistic short-term target by June 2025," Lee emphasized.
However, the expert warned that sharp jumps often precede corrections. Among the potential threats are the strengthening of the US dollar or geopolitical tensions.
