The Uncommon Cases of Crypto Market Bull Runs During the Stagflation

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Altcoins
The Uncommon Cases of Crypto Market Bull Runs During the Stagflation

Stagflation is possibly the worst peacetime economic condition in which nations may find themselves. During such dreary times, inflation usually rises quickly while the economy is either stagnant or in recession. At such times, more people are pushed into poverty since salaries are stagnant, and people become unemployed, yet prices of goods and services rise. As the turn of events in the last few months has established an industry-wide bear market, a few cryptos have maintained a bull run. Read on to find out more about these rare cases.

Explanation of the Stagflation in Question

The name is a big pointer to when the situation started; Covid 19 hit the world in 2019, originating in Wuhan, China. The real economic effect, however, hit the world in 2020 when covid 19 lockdowns were imposed worldwide. Economic recessions quickly followed all over.

These recessions prompted governments to intervene with drastic measures to alleviate the situation. Helicopter money was distributed by many countries to alleviate the purchasing pressures of both companies and households. These initiatives occurred in 2020, with inflationary pressures being stable by then.

However, these government initiatives were bound to create future problems. Too much money was being printed without any increment in goods produced, a clear manufacturer of inflation. 

Most of 2021 was relatively safe since economies were recovering with impressive growth figures. Real problems eventually started slightly before the third quarter of 2021. Dreary conditions such as rapidly slowing GDP growth were clearly visible in the 2nd quarter of 2021.

2022 was an even worse year, with governments worldwide responding with unprecedented rate hikes to tackle inflation. Stagflation conditions are currently noticeable in North and South America, Europe, and parts of Asia. Below are the cryptos that seem to defy the phenomenon, either entirely or intermittently.

The Cryptos That Had Impressive Bull Runs

Woodcoin

To begin with, woodcoin has been around for quite a while, with the Genesis block being first mined in 2014. So it isn’t a case of a very new coin that wasn’t market tested and hence had no other option but to go up.

For all its existence, the coin has been quite underground, only visible on the radar of the most avid crypto followers and obscure coin collectors. And these collectors’ faces will probably be all smiles in 2022, despite there being gloom in both crypto and mainstream stocks markets.

The coin hit its all-time high price on the 4th of July 2022 at a respectable $6.19. That alone is a clear testament to how the crypto has performed during this doom of the bear market, almost unheard of.

Secondly, the coin is currently enjoying impressive growth, having enjoyed a 5.08% rise in the last 24 hours from the article’s time. It’s like it has a Midas touch.

While the cause of its sudden meteoric rise remains a mystery, there is some hypothesis. First, it’s billed to only use renewable energy during the process of mining the coin, something that sits well with most people who are currently climate sensitive.

The recent Russian invasion of Ukraine, which caused sanctions from European trading partners and their subsequent switch to coal to replace Russian energy, raised climate awareness. It also recently launched a mobile app and a blog to improve its accessibility.

Tamadoge

Well, Tamadoge is a new coin, with its sale being as recent an occurrence as under a month old from the time of writing this piece. But that does not in any way reduce its tremendous performance, especially when the current sector-wide bearish market is concerned.

As a significant pointer, it raised around $1 million in three weeks. During the normal previous times in crypto standards, that’s still a pretty respectable performance for a new altcoin by any means possible, even borderline breathtaking. But during times when the crypto world is currently hovering at around ⅓ of its all-time high market cap, that’s mind-boggling, to say the least.

Even more stunning is that Temadoge is a memecoin, the crypto equivalent of a bad joke. If anything, memecoins should be the least expected cryptos to post impressive performance, given their high susceptibility to external socioeconomic conditions. Such a bull run is surely unprecedented at such times, even for a recently launched coin.

FTX Token

FTX is a bit of a misnomer, but it does fit the context quite well. To begin with, it is based on a crypto exchange, quite similar to the situation with Binance.

The second reason, it started its bull market and hit its all-time high quite early. The crypto reached its highest value on the 9th of September 2021, right at the start of the signs that impending stagflation was very likely. 

By then, most of the brightest economic think tanks could predict this with certainty, with the severity being the only unknown. The global value of the derivatives market, a speculative expenditure, was already more that 10 times higher than the global economy.

The ratio of the two was higher than what prevailed during the 2008 global financial crisis caused by the subprime mortgage implosion. An announcement of the eventual major interest rate hike globally was more likely.

Take Away

The global interest rates hike by major global economies in 2022 was likely considered by most hardline heterodox economists as the tombstone of cryptos and stocks. The signs of the hikes were already predictable by the third quarter of 2021. 

Impressive feats such as some cryptos experiencing implosive bull-runs that led to their all-time highs during the tumultuous time that caused some of the most powerful companies to become zombies was quite impactful.

Perhaps cryptos are already well pressed to start replacing fiat currencies as the next generation of money. Blockchain is already one of the most disruptive technologies of the centuries. It is already transforming art and gaming through NFTs and international transfers through non-custodial cheaper and faster transactions.

Julius Mutunkei

Julius is a blockchain reporter skilled at synthesizing all crypto-related information to make articulate texts easy for anyone to grasp. With a beginner's level certificate in Financial Analysis, Julius can read, interpret and report crypto findings to help investors exercise the best judgment in their decision-making process. When he is not caught up in the crypto frenzy, Julius likes playing a game of FIFA with his online buddies.