Oil prices, inflation, and the role of Bitcoin

The price of crude oil has surged by nearly 25% in the last three months due to increasing demand and falling supply. With OPEC Plus extending production cuts and global oil supply at its lowest level since 1985, oil demand has surpassed pre-pandemic levels. Rising oil prices have a strong correlation with CPI inflation, impacting multiple sectors of the economy. As gasoline prices follow suit, this surge poses challenges for the White House and the Federal Reserve's fight against inflation. In an inflationary environment, scarce hard assets like Bitcoin can potentially protect savings. Additionally, US households face concerns as saving rates decline and credit card debt reaches record levels, with an average interest rate of 28%. With excess savings accumulated during the pandemic depleting, households desperately need a store of value that cannot be inflated away. Bitcoin's volatility and recent price drop towards $25,000 are speculated to be connected to potential liquidations related to FTX bankruptcy proceedings and concerns over the security breach involving Fortess Trust, highlighting the importance of self-custody for Bitcoin investors.