Share 0 Tweet 0 Pin it 0. This is different to fiat currencies which use an inflationary model. Bitcoin operates on a model of deflation. This leads to a reduction in supply in relation to the increase in demand, which logically should cause a price spike. Cryptonite cryptonitecj CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. Disclosure Read More The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies.