Financial services giant Fidelity shared a new analysis that a new wave of inflation that may occur in 2025 $93,505.3He suggested that it could benefit .
2025 Bitcoin Predictions
Fidelity Digital Assets’ research director, Chris Kuiper, stated in his new report that “stubborn” inflation and fiscal deficits could lead to the United States entering a period of stagflation. Stagflation refers to a negative economic environment in which economic growth is stagnant and inflation and unemployment are high.
Kuiper noted that Bitcoin could react in different ways depending on fiscal and monetary reactions to stagflation. If it chooses to combat the recession part of the financial and monetary problem, Bitcoin could perform well. However, if controlling the inflation portion becomes a priority and significant cuts are made to the money supply, Bitcoin may face relative difficulties.
“Bitcoin could potentially perform well if financial and monetary institutions choose to combat the ‘stag’ problem with increased spending or monetary instruments. But probably with another delay.”
Kuiper noted that gold appreciated significantly during a second wave of inflation in the 1970s and 1980s. He also emphasized that although they don’t know what the future macroeconomic environment will be, Bitcoin could continue to benefit the portfolio in a variety of economic scenarios.
“While we do not know what the future holds for the macroeconomic environment for 2025, we think Bitcoin could continue to benefit the portfolio across a variety of economic scenarios.”
Potential Scenarios
Kuiper noted that if a recession were to occur, additional monetary and fiscal stimulus would be implemented, which has historically been positive for Bitcoin. He also stated that Bitcoin could perform well if risk assets continue to appreciate and inflation remains above the 2% target.
“If risk assets continue to appreciate and inflation remains above the 2% target, Bitcoin will likely perform well as well.”
However, if there are sharp reductions in fiscal spending and the money supply slows or reverses, Bitcoin may face relative hurdles. However, this scenario was stated to be the least likely scenario due to high structural deficits and a highly indebted monetary system.
Fidelity’s analysis shows that a possible wave of inflation in 2025 could create both opportunities and challenges for Bitcoin. How economic policies will be shaped stands out as an important factor that will determine Bitcoin’s performance. For investors, Bitcoin’s potential role against various economic scenarios continues to be evaluated.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
