Question regarding Bitcoin’s market rate relative to inflationary currencies

Something I’ve been wondering:

Right now, obviously there are larger macro-economic and socio-political factors at play that are suppressing Bitcoin’s market value. However:

  • Bitcoin is a deflationary asset
  • USD – and other national currencies – are inflationary assets

If you are to value BTC against the American dollar with these two factors in mind, would it not be reasonable to expect the market value of Bitcoin – relative to USD – to increase based on both of these factors? As in, Bitcoin’s value increases over time due to its decreasing new supply (mining rewards halving), but also simultaneously gains relative strength over the USD simply due to inflationary pressure on the USD?

If this is the case, I think this relative gain in strength simply due to lack of inflationary effects (which all other currencies are exposed to) could be one of the largest driving factors in BTC gaining value relative to national currencies – especially given the current situation with high inflation.

Once these broader market factors pass, one would expect that BTC would reflect this in its USD market rate – would it not?

submitted by /u/JustinPooDough
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