Many Bitcoin proponents believe the story is that large-scale monetary easing by the central bank will cause inflation, resulting in a sharp rise in Bitcoin (BTC) prices. However, economic experts have predicted that deflation is more likely than inflation.
Following the current economic turmoil of the new coronavirus, the US Federal Reserve Board is working on "unlimited quantitative easing."
Bitcoin proponents believe that unlimited issuance of banknotes will cause hyperinflation and increase demand for Bitcoin with an issuance ceiling of 21 million BTC.
For example, in a survey of crypto investors by the crypto exchange Paxful, more than half of US Bitcoin holders see crypto as a hedging instrument against inflation.
Cryptocurrency analyst Plan B has also argued that the Fed's quantitative easing would benefit Bitcoin.
However, economic experts are worried that deflation will occur rather than inflation.
Neil Irwin, a New York Times reporter, notes that negative oil futures prices are a sign of deflation.