What is the impact of Inflation on Crypto Assets?

Phase 1: Early Inflation

Market expectations of currency devaluation often lead to Bitcoin rising alongside gold.

Because everyone wants to avoid risk and move to "scarce assets".

Phase 2: High Inflation → Interest Rate Hike Cycle Initiated

The Federal Reserve has begun raising interest rates and reducing its balance sheet to curb Inflation.
At this time, the US dollar strengthens and liquidity tightens, causing risk assets (including Bitcoin) to decline instead.

For example, in 2022, the Federal Reserve violently raised interest rates → BTC fell from 69K to 15K.

Stage 3: Inflation falls → Expectations of policy easing

Once the market expects that the "interest rate hikes are nearing an end,"
Funds are returning to risk assets, and Bitcoin will rebound first.

So BTC usually leads the stock market response.