Inflation in Spain exceeds 10%, while Bitcoin gains followers

Inflation in Spain exceeds 10%, while Bitcoin gains followers

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Advance estimates of the Consumer Price Index (CPI) indicate that annual inflation in Spain for the month of July 2022 has risen to 10.8%.

with this number the inflation rate of the Iberian country is above 10.2% reached last June, when it registered a historical mark not seen in 37 years.

The current data represents a maximum of almost 38 yearssince September 1984. This growth is significantly affecting investors in traditional markets, according to data presented by the National Securities Market Commission of Spain (CNMV).

The agency published a statement on July 29 in which it presents financial market statistics so far in 2022. There it states that, due to the inflationary rebound, the financial market stress indicator went to the highest levels at the end of the first half of this year.

The stress indicator is a figure that provides a real-time measure of the systemic risk of the financial system. The mark ranges from 0 (very low stress) to 1 (very high stress).

According to the CNMV at the end of June and so far in July 2022 the indicator is above 0.5 giving the signal of high stress in the market.

The indicator started at 0.24 and ended the semester at an annual maximum of 0.501, which corresponds to a high stress level, somewhat above the upper threshold of the average stress level. Two maximums were recorded in the semester, 0.47 and 0.50, reached at specific moments of high uncertainty.

CNMV Financial Stability Note.

The stress indicator reached 0.50 in July 2022, higher than the level reached during the Covid pandemic in 2020. Source: CNMV Financial Stability Note.

The year began with rising inflation beyond what was expected in previous months, which, far from giving up, was once again driven by the increase in the prices of raw materials and energy linked to the geopolitical situation.

CNMV Financial Stability Note.

In this way, the two maximums of the stress indicator observed by the CNMV (0.47 at the beginning of the year and the most recent of 0.50), correspond to critical situations in the Spanish economy. Are situations experienced by investors as moments of great uncertainty.

The first peak of the indicator occurred with the start of the war in Ukraine (in February 2022). While the second –the highest– has occurred in recent months“after a more advanced and intense than expected tightening of monetary policy.”

The letter recalls that Spain, as a member of the European Union, is also affected by increasing interest rates by 0.5%. A new percentage established by the European Central Bank on July 21, as reported by CriptoNoticias.

Bitcoin, the other side of the coin

In the midst of the uncertainty and stress that the inflationary scenario is generating among a large part of the Spanish population and among investors, Bitcoin shows another side of the crisis.

This is what bitcoiners and companies linked to the ecosystem that have been settling in the European country point out. This is the case of Enrique de los Reyes, representative of Bitbase, who observes that many Spaniards have seen in the current situation an opportunity to continue growing.

On this subject, the executive offered an interview to CriptoNoticias earlier this year. He indicated that more than 5 million Spaniards have adopted bitcoin and other cryptocurrencies as an alternative means of investment.

He thus infers that, with growing inflation, the price of items rising and a depreciation of the value of the euro due to the printing of inorganic money, the Spanish they are in the need to look for options to help them cope with the situation.

This is a growing level of adoption that has been endorsed by the Bank of Spain, despite its criticism of Bitcoin.

In a report presented in April this year, the Bank admitted that 12% of Spanish adults own crypto assets. He also located the economy of Spain as one of the most active with cryptocurrencies.

The figures also position the country in the 5th position among those with the most cryptocurrency movement in Europe, mobilizing approximately 60,000 million euros.

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