Share this article
The market is reacting negatively to the consumer price index’s report on U.S. inflation.
Bitcoin, Ethereum Dip on Inflation Update
U.S. inflation has hit a 40-year year-on-year high, and crypto assets are sliding in response.
BTC/USD (Source: CoinGecko)
Bitcoin and Ethereum both dipped Thursday immediately after the Labor Department reported that the consumer price index had jumped 7.5% since last year. Price hikes in January contributed to the yearly rise as the cost of all items increased by 0.6%.
The 7.5% figure is the highest U.S. inflation rate the CPI has recorded since 1982. The Dow Jones had estimated that the figure would come in at 7.2%. Markets quickly reacted as the news that the rate had surpassed predictions broke, with futures on the S&P 500 and Nasdaq-100 respectively falling 0.8% and 1.3%.
Bitcoin took a 3.5% dip from around $45,000 to $43,400, while Ethereum fell from around $3,250 to $3,100. Many other lower cap assets, including the alternative Layer 1 coins Solana, Avalanche, and Terra, were harder hit.
The slump across global markets marks a stark contrast to the reaction to the news that U.S. inflation had hit record levels in November, when Bitcoin and Ethereum both rallied to all-time highs on the same day. The difference this time around is that the 7.5% jump indicates that the Federal Reserve is likely to push ahead with significant interest rate hikes in 2022 as planned (when interest rates increase, risk-on assets tend to tumble as the cost of borrowing money jumps).
The Fed first signaled that interest rate hikes would be coming in December, and crypto assets dipped on the news. Markets then dipped when Jerome Powell confirmed the rate increases in January. The market has looked shaky since, with both Bitcoin and Ethereum maintain momentum. They’re respectively down 37.5% and 36.2% from their highs recorded in November.
With interest rate hikes looking increasingly likely this year, crypto believers will be hoping that the market can make a recovery without spilling too much more blood.
Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies.
Share this article
The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
See full terms and conditions.
Bitcoin Hits $69,000 Alongside Rising U.S. Inflation Rates
Bitcoin continued its upward trend today, hitting another all-time high amidst reports of rising inflation in the United States. Bitcoin Worth $69,000 This Morning Early Wednesday morning, Bitcoin’s price jumped…
Bitcoin Falls 5% as Fed Confirms Interest Rate Hikes
Bitcoin prices fell by roughly 5% today alongside news that the U.S. Federal Reserve will raise interest rates in the coming months. Bitcoin and Ethereum Are Down Bitcoin (BTC) prices…
Markets Slump in Wake of Fed Meeting
The Fed will stick to its plan of raising interest rates in March, according to the report from this week’s Federal Open Market Committee meeting, released today. Although the move…
OVR – the largest decentralized AR Metaverse
OVR is the decentralized infrastructure for the metaverse, merging physical and virtual world through Augmented Reality, creating a new dimension where everything is possible. It’s composed of 1.6 trillion unique hexagons…
