Inflation’s Silent Threat: Is Crypto Creeping in on Traditional Diversifiers’ Turf?

In today’s markets, uncertainty has become the new normal, putting pressure on traders and investors alike. Changing tariffs, shifting monetary policies, and persistent tensions are weighing on sentiment and dampening global growth. The UN Conference on Trade and Development (UNCTAD) expects global growth to decline to 2.3%, just 0.2 percentage points above the threshold for a global recession.

But beneath it all lies another enduring threat: inflation. Even as numbers improve, its effects continue to ripple through asset prices, investor behavior, and risk perceptions. According to the International Monetary Fund (IMF), global inflation is projected to fall to 4.2%, down from 5.9% in 2024 and 6.8% in 2023. On paper, this is progress, but it’s nowhere near the levels it considers healthy.

For traders and investors, this means that while inflation may no longer dominate headlines, its presence will still define the landscape. Still shaping where capital flows, how portfolios are hedged, and which assets emerge as safe havens. And this is why many are now asking: Could crypto be emerging as the next inflation hedge, challenging the long-standing dominance of traditional safe havens?

Cryptos as Gold’s Challenger

Safe havens tend to perform reasonably well during recessions, and for decades, gold has been the default refuge, an anchor during economic storms. In recent years, bitcoin has emerged as its digital challenger, often described as “digital gold.” But that comparison might not be entirely grounded in reality. Let’s take a closer look.

On the surface, they seem alike, sharing certain traits: they are both scarce, speculative, and finite. Both are used in a limited capacity for transactions, influenced by demand, and dependent on third parties such as miners for supply. Yet, their behavior tells a different story.

Although cryptocurrencies tend to behave similarly to traditional assets during inflation, i.e., lose value, they behave differently when policy uncertainty is added to the equation. During past geopolitical instability, we have seen the market treat certain cryptocurrencies, like bitcoin, as safe havens. The reason behind this phenomenon is that cryptocurrencies are decoupled from government policy and currency manipulation, giving them an independent appeal during institutional mistrust.

This isn’t theoretical. Bitcoin rallied before and after the 2016 US elections, during the early stages of the COVID-19 pandemic, and at other global events when confidence in traditional systems wavered. The question then isn’t whether bitcoin can move during uncertain times, but whether it can protect.

Is Bitcoin a Safe Haven?

A study by Sangyup Choi and Junhyeok Shin of Yonsei University’s School of Economics found that while bitcoin tends to depreciate during periods of financial uncertainty, it rises in value during times of policy uncertainty, precisely because it operates independently of governments and central banks.

We are now in such a period, one defined by both geopolitical tensions and shifting trade policies. In these conditions, investors often diversify across assets that aren’t directly tied to fiscal or monetary decisions. This is where bitcoin’s appeal lies: it represents freedom from institutional control, a self-contained system that functions outside the traditional policy loop.

Another study highlights the fact that it may be a strong hedge for oil, the US dollar, EU indices, and ETFs. It also suggests that the correlation between gold, bitcoin, and US indices such as the S&P 500 and Nasdaq 100 may indicate that investors are also starting to view the cryptocurrency as a safe haven.

Still, there is an important caveat. Cryptocurrencies remain inherently volatile, and bitcoin’s short history means its safe-haven status is conditional, not guaranteed. Gold, by contrast, has earned its reputation over centuries. For risk-averse traders, gold still offers stability, while bitcoin, with its asymmetric upside, may serve as a diversification tool rather than a replacement.

Hedging With Exness

A hedge is only as effective as the conditions that power it. In periods of volatility or uncertainty, when CFD traders turn to instruments like gold or bitcoin CFDs to manage exposure, execution quality becomes critical. In those decisive moments, it’s the trading conditions that determine whether your strategy holds or breaks.

Exness provides CFD traders better-than-market conditions, meaning spreads, execution, and withdrawals that outperform what’s typically available to market participants. Its proprietary engine ensures precise execution, even during high-impact news,1 when traders need to rely on it the most for their hedge.

Price transparency and stable spreads also play a critical role. With its stable spreads on BTCUSD, which are four times lower than the industry average,2and the best spreads on XAUUSD,3Exness ensures that both digital and traditional hedges, like gold and bitcoin, work as intended.

The experience extends beyond the time markets are open. Exness has been offering the fastest withdrawals since 2009, and today, 98% of withdrawals are processed automatically.4

In essence, hedging with Exness means hedging with more control. CFD traders can execute, manage, and withdraw with the same confidence that drives their strategies, no matter how turbulent the markets become.

1 Precise execution claims refer to average slippage rates on pending orders based on data collected between September 2024 and July 2025 for XAUUSD, USOIL, and BTC CFDs on the Exness Standard account vs similar accounts offered by four other brokers. Delays and slippage may occur. No guarantee of execution speed or precision is provided.

2 4x more stable spreads claim refers to maximum BTCUSD CFDs spreads on the Exness Pro account, based on data collected from 12 to 25 May 2025, compared with average maximum BTCUSD CFDs spreads across the tightest commission-free accounts offered by eight other brokers.

3 Best spread claims refer to the lowest maximum spreads and the tightest average spreads on the Exness Pro account, for XAUUSD and USOIL, based on data collected from 12-25 May 2025, when compared to the corresponding spreads across commission-free accounts of other brokers.

4 At Exness, over 98% of withdrawals are processed automatically. Processing times may vary depending on the chosen payment method.