According to Compounding Quality, high inflation leads to a reduction in purchasing power, which often drives investors to seek alternative assets like cryptocurrencies that are perceived as hedges against inflation (source: Compounding Quality on Twitter, June 9, 2025). For traders, periods of rising inflation typically coincide with increased volatility and trading volumes in Bitcoin and other crypto assets, as market participants shift capital away from fiat currencies. Monitoring inflation data can provide actionable signals for crypto trading strategies, especially when inflation trends diverge from central bank targets.