It did and does have a massive effect on the supply and demand ,
increasing the supply so dramatically it crashes the price because demand was not at that level yet.

Technically not inflation, as once these coins find new homes, the original sender will not be able to generate that amount from Pure interest, he has to now sell his principle, and at some point he stops or loses all of his principle for good.
If it was still all pure interest, he would be able to crash the price for eternity and never lose principle, which is why we had to move to ULI.

We had multiple years of high inflation, this is not an unexpected event, due to that high inflation.
Like all storms , the faithful will wait it out as it will not last forever.