Consumer confidence in the United States has plummeted to its lowest level in over two years, just as inflation expectations have surged.

According to the latest data from the University of Michigan, the Consumer Sentiment Index dropped from 64.7 to 57.9, reflecting growing concerns among Americans about the economy.

But what does this really mean for the U.S. economy? And, more importantly, how will it impact the crypto market?

Inflation Expectations Are Skyrocketing

One of the most alarming takeaways from the report is that Americans now expect prices to rise by 3.9% per year over the next five to ten years—the biggest jump in inflation expectations since 1993.

Short-term projections are even worse: Consumers anticipate a 4.9% inflation rate in the coming year, marking the highest level since 2022.

This pessimism comes despite recent data showing that inflation has slightly cooled down in the past few months. However, fears over rising costs remain strong—especially due to the expansion of import tariffs, which could drive up prices for food, fuel, and other everyday expenses.

Economic & Political Uncertainty Add to the Chaos

Nearly half of respondents in the survey blame the rising inflation expectations on the government’s recent increase in import tariffs. And it’s not hard to see why.

With economic policies shifting constantly, Americans are finding it nearly impossible to plan their financial future. This uncertainty is shaking up wallets and markets alike—causing investors to rethink their strategies and leading to higher volatility across financial assets.

What Does This Mean for Crypto?

Despite the collapse in U.S. consumer confidence, financial markets—including crypto—seem largely unbothered. Bitcoin (BTC) and other digital assets remain firmly in the green, signaling that investors might be interpreting the situation differently than the average consumer.

One possible reason? Rising inflation expectations could actually increase demand for alternative assets like Bitcoin.

Just like gold, BTC is increasingly being viewed as a hedge against economic instability and inflation. Investors may also be betting on potential interest rate cuts later this year, which could inject more liquidity into the markets and benefit risk assets like crypto.

That said, the long-term impact remains uncertain. If inflation rises faster than expected, it could put downward pressure on the markets.

For now, though, crypto appears resilient, and prices are holding strong as broader optimism spreads across financial markets.

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Roman Blecha

I have 6 years of writing experience on several leading websites dealing with cryptocurrencies and other investments. I have been in the Web3 sector for a similar amount of time and have collaborated on several projects from NFT to P2E. My previous experiences: Business2Community.com, TradingPlatforms.com, CryptoSvet.cz