The achievement of a new all-time price record came on the news that inflation in the United States reached a 30-year high. Will Bitcoin continue to rise?
The largest cryptocurrency in the world, Bitcoin, has set a new price record this Wednesday above USD $ 69,000 amid reports of high inflation by the United States government.
This morning, the price of Bitcoin rose close to $ 3,000, or 4%, in a matter of hours reaching an all-time high of $ 69,044, according to data from CoinGecko. The price spike came shortly after the US Department of Labor published a report indicating that the cost of living in the country rose 6.2% in October over the previous year.
According to the US government agency, the consumer price index (CPI) increased at its fastest rate since 1990. The CPI, which tracks the prices of goods and services ranging from gasoline to rent, has risen just over 6% since October 2020, and has increased 0.9% over the past month.
The report also indicated that core inflation in the US, which excludes the volatile component of food and energy, rose 4.6%, the highest rate since August 1991. The increase in inflation was “broad-based, with increases in the indices of energy, housing, food, used cars and trucks and new vehicles among the largest contributors“Said the Bureau of Labor Statistics of the Department of Labor in its release.
Inflationary outlook favors Bitcoin
The report detailing the rise in the CPI to its highest rate in the past three decades sparked fears around high US dollar inflation, prompting a sudden spike in cryptocurrency market prices. Bitcoin it was particularly favored by the reports, possibly due to the underlying narrative of its use as a hedge asset of similar value to gold.
A significant number of experts have defended the potential of Bitcoin as a hedge asset such as inflation due to its limited supply of coins. Among the defenders, billionaire Paul Tudor Jones Told him to CNBC last month I conceived Bitcoin as a hedge of inflation higher than gold. The banking giant JPMorgan echoed this idea in a recent note noting that institutional investors share the idea as well.
“The resurgence of inflation concerns among investors has renewed interest in using Bitcoin as a hedge against inflation.The bank wrote in October.
The top cryptocurrency by market capitalization had reached new price heights above $ 65,000 last month following the approval and launch of the first ETFs of Bitcoin In U.S.A. The digital asset registered a new rally this week, rising more than 3% in the last 24 hours and 10% in the last week.
At press time, BTC is trading at $ 68,642 with a market capitalization of $ 1.29 trillion (or a trillion). This figure represents about 41.5% of the total digital currency market capitalization, which is currently modestly over $ 3 trillion.
Bitcoin up to $ 100,000?
It should be noted that the price of gold – a traditional hedge against inflation – also increased after the report from the US Department of Labor. GoldPrice, the price of Precious metal rose 1.3% to a five-month high of $ 1,853 (per ounce). For its part, the stock market seems to have been affected.
Shares of the US stock market began their trading session on Wednesday in the red, with the benchmark S&P 500 index trading 0.29% lower, it reported. The Block. Meanwhile, the “equilibrium rate“Five-year US inflation expectations, an indicator of inflation expectations for the next five years, as derived from bond market indicators, has risen above 3%, the highest since at least 2001, according to Bloomberg.
For now, it seems that the data published by the US Department of Labor could test the statements of the president of the Federal Reserve of the country, Jerome Powell, who has assured on different occasions that high levels of inflation will be transitory and will decrease once the global economy reopens again after overcoming the restrictions of the pandemic.
Some advocates in the crypto community have questioned these statements, anticipating that Bitcoin could break the long-awaited $ 100,000 barrier this year amid the inflation outlook. No doubt, all eyes are on Bitcoin and the rest of the digital asset market, but it remains to be seen whether the flagship cryptocurrency will hit new highs in the next – and last – weeks of 2021.
Hannah Estefanía Pérez’s version / DailyBitcoin
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