Inflation in Australia has hit a 32-year high. According to P2P bitcoin trading volume, Australians appear to be switching to bitcoin (BTC) to hedge against inflation.
Australians are flocking to Bitcoin and cryptocurrencies as the country sees inflation rates hit a 32-year high. According to the Australian Bureau of Statistics, the consumer price index rose by 1.8% in the last quarter. That puts the annual inflation rate at 7.3%, the highest since 1990.
Australia inflation rate: tradingeconomics.com
As this inflation rate has risen, Australians have turned to Bitcoin to protect their wealth. P2P trading volume for the asset has surged over the past few quarters. Volume in the third quarter of 2022 is up 15% quarter-on-quarter while it’s up 27% year-on-year. Similarly, Q2 2022 saw a 31% increase year-on-year.
These numbers are especially significant given the bear market the crypto asset class has been going through this year. Australians are clearly willing to invest some of their wealth in Bitcoin to hedge against inflation. While that narrative has lost some of its weight in recent months, it hasn’t entirely disappeared.
Bitcoin is still viewed as an inflation hedge
The inflation rate in Australia gives experts cause for concern. The Reserve Bank of Australia (RBA) had expected inflation to peak at 6%. Analysts expect this quarter to see even worse core and headline numbers. Therefore, the RBA can prompt rate hikes, which are already happening in many countries.
Since May, the RBA has hiked rates by 250 basis points, an impressive figure. At a time like this, the rise of bitcoin trading means Australians are looking to the crypto market as a place to keep their funds safe.
Australia is working on crypto regulations
While Australians have increased their positions in Bitcoin, the government has stepped up its game of crypto regulation. Australia’s Treasury released a statement in August that it had started work on crypto-asset reforms. She claims that this arrangement would be different “nowhere else in the world”.
One of the reasons the government is speeding up work on regulations is the use of crypto in criminal activities. Federal law enforcement believes this is an emerging threat, as do many other law enforcement agencies. The Australian Securities and Exchange Commission also recently suspended three Holon crypto funds.
Meanwhile, Australia has published a CBDC whitepaper and released details of a pilot program. The government is keen to use the technology and the pilot will last a year.
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