Global inflation rate changes significantly impact the cryptocurrency market. Rising inflation often drives investors to seek alternative assets like Bitcoin, viewed as a hedge against currency devaluation. When inflation surges, fiat currencies lose purchasing power, prompting interest in decentralized digital currencies. For instance, Bitcoin’s fixed supply contrasts with inflationary fiat, making it attractive during economic uncertainty. However, high inflation can also tighten monetary policies, increasing interest rates and reducing liquidity, which may lead to sell-offs in riskier assets like cryptocurrencies. Conversely, declining inflation can stabilize traditional markets, potentially reducing crypto’s appeal as a safe haven. Overall, inflation trends shape investor sentiment, market volatility, and capital flows in the crypto space, with effects varying based on macroeconomic conditions and regulatory developments.