The 32-year high inflation rate in Australia has prompted more local investors to turn their attention to digital currencies.
The rate of inflation in Australia reached 7.3%, the highest level in 32 years. Analysts predict that this number will increase even more before the year is through due to the rising costs of gas and real estate.
Locals have shown greater interest in alternative financial assets, like as cryptocurrency, in an effort to protect their wealth during these uncertain times.
The Australian government has likewise prioritized cryptocurrency. Anthony Albanese, the country’s new prime minister, promised to enact stringent regulations in the industry while still “leaving opportunity for innovation.”
What Was the Crisis’ Cause?
Australia is another another nation dealing with significant financial difficulties. At the height of the COVID-19 pandemic, the country was almost cut off from the rest of the globe. While the impact of the health catastrophe and the death toll were lessened as a result, Australia’s trade volumes decreased in comparison to other jurisdictions with less stringent regulations.
The nation’s central bank printed billions of dollars to keep the economy afloat; this action is seen as one of the primary causes of the 7.3% inflation rate that is currently in effect. Natural calamities that frequently strike the country have also had a harmful impact on Australia.
Over 30 individuals died as a result of massive wildfires that burned hundreds of houses between 2019 and 2022. To deal with the disaster, the government spent between $4 and $5 billion.
The issues were made worse in 2022 by a lot of rain and a string of floods in various Australian provinces, notably Queensland and New South Wales. The government provided affected people with an additional $3 billion so they could rebuild.
“There will be broader cost of living relief in the budget as well, but we need to be very, very careful that any cost of living relief that we provide in the budget doesn’t push up inflation further when Australians are already under the pump,” Treasurer Jim Chalmers warned regarding the stimulation package.
The military confrontation between Russia and Ukraine and the global energy constraints are two other clear causes that contributed to the 32-year high inflation rate.
Is Bitcoin Now More Alluring?
In nations with significant inflation and economic problems, cryptocurrency has grown in popularity, especially bitcoin and stablecoins. If Australia were to observe two different polls from 2021 and 2022, this remark might also apply to that country.
According to a Finder’s study from the previous year, 17% of Australians had some exposure to digital assets. The business predicted that by 2022, the share will have climbed to almost 23%. The most widely used cryptocurrency is still bitcoin, although Ethereum, Cardano, and Dogecoin are all top choices for local investors.
The party doubled down on its plans in August, saying it will examine which cryptocurrencies are the most popular in Australia and supervise them. The initiative, classified as “token mapping,” should see the light of day before the end of 2022.
