Cryptocurrencies have become really popular in the last few years. A lot of things have changed during this time expect the fact that Inflation has been steadily on the rise. The high returns associated with crypto have attracted a lot of investors. And now, a European securities regulator warns that higher Inflation could push even more investors toward crypto. The regulator has also stressed the need for a common regulatory framework for all European countries.
High Inflation is positive for crypto adoption
If you have followed the crypto markets for the past 2 years, then you must have realized how much effect stimulus checks had on the price. Whenever the Biden government printed money, and an announcement was made, we saw significant price increases most of the time. So, it is clear that high Inflation often had an impact on the adoption of crypto. You could look at it in different ways; it’s either when people have a lot of money they invest in crypto. Or when they have less money but high Inflation is pushing them to chase higher returns.
Bitcoin is often seen as a hedge against Inflation by many investors, and despite its volatility, it has a proven track record of delivering high returns over a long time frame. This makes it an attractive investment option for those who are willing to take the risk to get higher returns.
Right now, there are no proper regulations for all countries in the European Union. Therefore, the securities regulator has requested a framework that will keep the rules and regulations consistent across all nations in the EU. It is necessary because when more people invest in cryptocurrencies, they will need to ensure the protection of these investors.
Depression is coming
Robert Kiyosaki recently warned about an upcoming depression and the crash of stocks and bonds. If such a thing happens, it will be an even more significant driver of cryptocurrency adoption. So, it is clear that the authorities do need to work on their regulations before we see something major happen in the industry.
Do you also think that Inflation could push investors to crypto to chase higher returns? And is there a need for a unified regulatory framework for all EU countries? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.
Also Read: Russian Central Bank embraces Bitcoin for foreign payments.
