Central Banks‘ Dilemma: Inflation, Stagflation and the Cryptocurrency Response

• Bitcoin’s 30k plunge – short-term holders sell off BTC, long-term holders unfazed
• Fed balance sheet declines for fourth consecutive week – down $141B
• The central banks’ dilemma: inflation, stagflation, and the cryptocurrency response in today’s economy

Bitcoin’s Plunge

Bitcoin experienced a significant 30k price drop as short-term investors sold off their holdings while long-term holders stayed strong. This month has seen the Fed balance sheet decrease by 141 billion dollars over four weeks.

The Central Bank’s Dilemma

The current economic climate has caused alarm among central banks due to inflation and a stalling of economic demand. These conditions have created similarities between the present and the 1970s, leading to fears of stagflation. Gold and Bitcoin are responding to these pressures in different ways.


Inflation is an increase in prices that comes from too much money chasing too few goods or services. It can also come from increasing costs of production such as wages or materials. Central banks attempt to control inflation by raising interest rates or reducing the money supply through bond purchases.


Stagflation is a combination of slow economic growth and high inflation that creates stagnation in the economy. During this time, unemployment rises while prices rise faster than wages making it difficult for people to maintain their standard of living without taking on debt or saving less than before. This situation is especially dangerous for those on fixed incomes such as pensioners and retired workers who can no longer rely on savings or investments to keep up with increasing prices.

Cryptocurrency Response

CryptoSlate Alpha members have access to exclusive insights into how gold and Bitcoin are responding differently to these inflationary pressures which could be crucial for understanding how best to protect your finances in times of uncertainty.