Impact of Inflation on Cryptocurrencies in 2025:
A Double-Edged Sword
Persistent inflation in 2025, with the core CPI in the US at 3.1% annually and pressures from protectionist tariffs, is shaping the crypto market in an ambiguous way.
High inflation (3.1% in the US, with food prices rising 5.8% since 2023) pressures the Fed to keep interest rates high, draining liquidity from risk assets like cryptos. Bitcoin, at $116,500, and Ethereum, at $4,150, fall by up to 6% in "hawkish" scenarios. But recent interest rate cuts (rate at 4%-4.25%) and a weak dollar (DXY -10.8%) reignite appetite for BTC as an "inflation hedge," driving daily gains of 2-3%. On X, traders warn: “High inflation hurts, but BTC shines if the Fed eases.” Stablecoins like DAI gain traction, but the risk of 50% corrections looms if inflation surges.
