Deflation

Deflation is an economic condition where the overall price level of goods and services declines. This increases the purchasing power of money. It can result from reduced consumer demand, increased productivity, or a decrease in the money supply. While it might seem beneficial, persistent deflation can lead to reduced business revenues and wages, increased debt burdens, and economic stagnation. In the crypto/fiat exchange context, deflation can affect the relative value of currencies and impact trading strategies. Understanding deflation helps in making informed financial decisions.