Consumers in the United States and effectually the earth go on to feel the compression of inflation and recent information shows that the Consumer Price Index (CPI) rose 6.ii% in October when compared to last yr, a development which farther cast doubtfulness on the "transitory" inflation narrative coming out of the Federal Reserve.

As a result of the high print, traditional financial markets took a hitting on November 10 every bit concerns near runaway inflation and the loss of purchasing power weighed heavily on the minds of investors and major indicies pulled back from new record-highs that were gear up earlier in the calendar week.

That is in contrast to the price action in the cryptocurrency market place, where a burst of bullish momentum sparked a iv.7% rally in the toll of Bitcoin (BTC) correct every bit the CPI data was announced.

BTC/USDT 4-hour chart. Source: TradingView

The rapid rise in inflation over the grade of 2022 has led to an increasing number of calls for the Fed to finish its easy-money policies and raise interest rates. Many claim that the central bank has pinned itself in a corner and has no easy options moving forward considering a rise in interest rates could brand servicing the U.S. national debt even more challenging.

According to contempo statements from former U.Southward. Treasury Secretarial assistant Larry Summers:

"Global financial markets appear to be anticipating dull growth and low existent interest rates for the next few years, which will gut the power of primal banks to guide economies."

With the control of interest rates being the principal tool at the disposal of the Fed for exerting influence on the market, it appears that at that place is picayune else likewise standing to print money that the central bank volition be able to practise in response to ongoing challenges.

Bad for fiat, good for crypto

Cryptocurrency holders are uniquely positioned to do good from, or at least receive some shelter from these latest developments because the declining value of fiat currencies similar the dollar has highlighted the power of Bitcoin and other altcoins as hedges confronting currency devaluation and inflation.

According to data from Bitcoin Stimulus, Americans who put their $1,200 stimulus check from April 2022 into BTC, would now accept $12,172 worth of BTC. This represents an increase of 914%.

Current value of the $ane,200 stimulus check from April 15, 2022. Source: Bitcoin Stimulus

And those gains haven't been isolated to the tiptop cryptocurrency considering the entire market has seen an influx of funds that lifted the total market place capitalization from $190 billion to $ii.95 trillion during the same flow.

Full cryptocurrency marketplace capitalization. Source: CoinMarketCap

On peak of the increase in value for a large number of tokens on the marketplace, cryptocurrency holders take besides been rewarded with numerous cryptocurrency "stimulus checks" in the class of airdrops like the contempo one from Ethereum Proper name Service, which created a five-figure payday for early on adopters of the protocol.

Overall, participants in the cryptocurrency market place have benefited from the protection offered by holding assets that are appreciating in value equally the purchasing power of fiat currencies deteriorates, a process that shows no signs of slowing down in the foreseeable future if the rate of inflation continues to rise.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading motility involves risk, you should bear your own research when making a decision.