What happens to the price of a cryptocurrency when hyperinflation stops?

in criptocurrency •  7 years ago 

Steem, Bitcoin, and many other cryptocurrencies often experience a hyper-inflationary period. Usually shortly after they are launched.
Which, as you can imagine, might be quite a drag on the price.

If the supply is ever increasing, there must also be a corresponding increase in demand to offset the increasing supply.

If there is any dip in demand, prices go down.

A quick look at the long term chart of Steem is a perfect example of this:
As you can see the price shot way up when payouts first started taking place only to trend down over an extended period of time.
Part of the reason for this was that at that time the inflation rate of steem was very high.

Since that time, the inflation rate has been drastically reduced.

Later on, when we saw an increase in demand earlier this year, we can see on the chart what that did for the price.

The price rallied from a low of around $.07 to a high of just under $3 per U5dtQXzuZyeDZ8d4S9V6GPZf1xXJ8i6_1680x8400.png

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