IS THE VALUE OF BITCOIN CORRELATED WITH THE AMERICAN INFLATION?

In green, on the primary axis, there are the annual inflation rates of the US dollar from 2013 to 2017.

In orange, on the secondary axis, there are the growth rates of the value of Bitcoin from 2014 to 2017 (the data are extracted from Coinmarketcap, and that is why the series can only start in 2014).

At first glance it would seem that there can be a correlation. In reality this chart shows absolutely nothing, also because the orange series is very short, but it can serve to stimulate further insights in this regard (among other things, the partial data of 2018 would seem to be quite in line with these, net of the speculative bubble end of 2017).

We must not forget that Bitcoin has been specifically created to be a deflationary currency, and in particular as a "substitute" for inflationary fiat currencies. In other words, the more the inflation of the fiat currencies increases, the more theoretically it could increase interest in deflationary currencies such as Bitcoin (especially by those who have savings in foreign currency and do not want to lose value). So if there was indeed a correlation between the inflation of the US dollar and the increase in value of Bitcoin there would be nothing to be surprised about.

US dollar inflation data was taken from in2013dollars.com, while Bitcoin related data was extracted from the historical dollar exchange rate series published on Coinmarketcap. In particular, for each day the average between the minimum and maximum prices was calculated, and then the average annual average daily was calculated so as to calculate the annual average values ​​of BTC, and their rates of increase year on year.