With the US Federal Reserve now openly warning of stagflation, Bitcoin is rapidly emerging as a preferred option for investors seeking insulation from mounting economic stress.
This is according to Nigel Green, chief executive of deVere Group, who says the expected rise in US consumer prices, coupled with weakening labor and investment data, signals that the US is now firmly in stagflation – a term used to describe the rare and dangerous combination of persistent inflation, low growth, and rising unemployment.
“Stagflation is no longer an academic debate – it appears to be the Fed’s base case,” says Green. “When central banks start using the word publicly, it confirms what markets are already feeling, and in this environment, Bitcoin becomes a standout option.”
Headline inflation is forecast to climb to 2,5%, with core inflation up to 2,9%. Tariffs introduced under US President Donald Trump – now hitting many key imports with 10% to 50% duties – are fuelling price pressures, particularly in consumer goods like clothing, furniture, and auto components. At the same time, jobless claims are rising and business investment is slowing.
“This is policy-driven inflation combined with real economic weakness,” explains Green. “When those forces collide, conventional assets become vulnerable. Bitcoin is one of the few that stands apart.”
Recently, Fed chair Jerome Powell acknowledged that inflation is not subsiding as expected and that recent data suggest a deteriorating outlook for the broader economy.
The central bank’s own messaging has shifted, reflecting the growing view that it may be cornered – unable to raise rates without deepening the downturn, and unable to cut them without fuelling inflation.
“This is what stagflation looks like,” says Green. “There’s no obvious policy response. That’s why we’re seeing clients globally repositioning – and Bitcoin is increasingly where they’re going.”
He says Bitcoin’s appeal lies in its independence from governments, its fixed supply, and its growing role as a hedge against both monetary distortion and fiat currency risk. As traditional safe havens face pressure, the case for decentralised stores of value is strengthening fast.
“Bitcoin doesn’t rely on interest rate policy or political stability. It operates on entirely different rails,” says Green. “This makes it extremely attractive in a moment like this, where markets are struggling to price what comes next.”