Cryptocurrencies have long been considered a hedge against inflation and a better alternative to fiat currencies that are susceptible to devaluation concerns. Most cryptocurrencies have significantly underperformed benchmark stock market indices due to liquidity pressures brought about by the tightening of monetary policy by leading central banks such as the U.S. Federal Reserve.
Aimed at slowing down record inflation numbers being reported about the world’s largest economy, the quantitative tightening has caused both stock and cryptocurrency prices to correct significantly from their peaks and is eerily reminiscent of the bear cycle in 2017.
