Definition ∞ Economic instability refers to conditions of significant volatility and unpredictability within an economy, often marked by high inflation, currency devaluation, or market uncertainty. Such environments can prompt individuals and institutions to seek alternative stores of value. Digital assets sometimes present themselves as hedges against traditional financial system vulnerabilities.
Context ∞ In periods of global economic instability, digital assets frequently draw renewed attention as potential safe havens or alternative investment vehicles. Debates persist regarding their effectiveness as inflation hedges versus their inherent price volatility. Regulatory bodies worldwide are examining how digital assets might impact or respond to broader macroeconomic shifts.
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