Hello subscribers! Welcome to the 6th edition of the Techemynt fortnightly newsletter. Over the last fortnight, prices across digital asset markets have pulled back. A key creator of this bearish environment is surging global inflation.
German producers paid 37.2% more for commercial goods in July 2022, compared to the same month the previous year. This is the highest recorded jump since 1949. It captures the triple-digit percentage prices that industries have had to pay for energy as Germany has attempted to move away from the use of imported natural gas from Russia in response to Moscow’s invasion of Ukraine.
Without significant government intervention like tax cuts, it appears likely these high prices will pass on to consumers. With one of Europe’s largest economies struggling to deal with rising stagflation tides, it appears that much of the global economy is fighting the same battle.
Traders sold out of perceived risk assets, like speculative crypto, because of fears that a recession driven by rising costs may occur. They may turn to solutions like DeFi which offers users access to stable (high) yield-bearing assets. NZDS is one such asset that some investors holding risk assets may turn to. Protocols like DFX and Jarvis are offering double-digit yields to liquidity providers in pools containing NZDS and other stable assets.