Bitcoin ETF, CPI, and inflation take center stage in crypto conversations
According to data from Santiment, the most popular topics being discussed on social media in the crypto community are the Bitcoin exchange-traded fund (ETF), the consumer prices index (CPI), and inflation. It’s no surprise that Bitcoin ETF discussions are at the top of the list, as many market participants are eagerly awaiting the approval of a spot Bitcoin ETF, which they believe will propel the entire crypto market to new heights. This is especially true for regulated financial institutions that are looking for increased accessibility to the crypto market. However, despite a recent report suggesting that the United States Securities and Exchange Commission (SEC) may reject all Bitcoin ETF applications this month, the conversation surrounding Bitcoin ETFs continues to dominate the crypto space.
The focus on the CPI and inflation is a return to the original ideas behind the creation of Bitcoin. Bitcoin was born out of a desire to challenge the existing monetary system, which is perceived to exploit the masses and create value out of thin air. It was a reaction to a fiat monetary system that allowed governments to print money at will. The crypto community has a history of bringing these topics back into the spotlight. For example, in August 2021, the fifty-year anniversary of the US going off the gold standard sparked discussions within the crypto community about the consequences of that decision, including the removal of caps on inflation and the decoupling of net productivity from wages.
The current economic system is also drawing criticism from the crypto community, with growing prices for consumer goods and increasing inflation being key concerns. According to the United States Bureau of Labor Statistics, the 12-month CPI change indicates an average increase in prices of 3.1%, with food prices rising by 2.9% and prices for all other items increasing by 4%. Energy costs, however, decreased by 5.4% due to the changing geopolitical landscape caused by the war in Ukraine.
Inflation is also eroding the value of money, with the US Inflation Calculator suggesting that the US dollar has experienced 18.6% inflation since 2020. This means that an item that cost $100 in 2020 would now be expected to cost $118.6. As a result, the crypto community is increasingly highlighting Bitcoin as not only a store of value but also a hedge against rapidly increasing inflation.
Overall, the crypto community is reaffirming its core ideas and beliefs, emphasizing the potential of Bitcoin and cryptocurrencies to challenge the existing financial system and provide alternative solutions to the problems of inflation and exploitation.
