Definition ∞ Low inflation refers to a state where the general price level of goods and services increases at a slow and controlled rate. In traditional economics, this typically means a moderate rise in the cost of living, which is often considered healthy for economic growth and stability. Within the digital asset context, low inflation often describes cryptocurrencies designed with a limited supply or a predictable, decelerating issuance schedule. This design aims to preserve purchasing power over time, contrasting with fiat currencies that may experience higher inflation.
Context ∞ Discussions about low inflation are central to the value proposition of many cryptocurrencies, particularly those with deflationary or capped supply mechanisms like Bitcoin. News reports often compare the inflationary characteristics of fiat currencies with the programmed scarcity of digital assets. The concept is frequently cited as a key attribute attracting investors seeking a hedge against traditional economic policies.
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