Inflation rate in the US is the highest in 39 years, crypto market jumps modestly

Texas could raise funds through NFT and harness 'abundant' energy to mine Bitcoin

Inflation rate in the US is the highest in 39 years, crypto market jumps modestly For Hannah perez

The US consumer price index (CPI) has risen 6.8% this year. Inflation reports favored the price of Bitcoin, albeit only for a moment.

***

The inflation rate in the United States continues to rise at a rapid rate not seen in nearly 40 years, according to the latest official reports.

The US Department of Labor said Friday that inflation rose in November to its highest level since 1982. The federal agency said the Consumer Price Index (CPI), which measures the cost of a wide basket of goods and services, has risen 6.8% in the last 12 months. The figure is the highest since the 1980s, when the inflation rate was 6.9%.

As such, the CPI rose 0.8% during the month of November and after having risen 0.9% in October. For its part, the consumer index, which excludes food and energy prices, has increased by 4.9% compared to the previous year, representing the steepest rebound since mid-1991.

As reported by various news outlets, the latest figures were adjusted with the predictions of some analysts. A group of economists surveyed by Reuters it had forecast that the CPI would rise 0.7% and rise 6.8% year-on-year. However, the inflation rate remains significantly higher than the target set by the US Federal Reserve (FED) of 2%.

See also  Ferguson, the last one who punished Madrid and 39 years ago!

Bitcoin touched $ 50,000 momentarily

News of rising inflation in the US favored the digital currency market, which posted a momentary rebound after the reports. Bitcoin It skyrocketed close to $ 2,000 to briefly regain the $ 50,000 mark while other major cryptocurrencies also spiked amid the announcements.

Inflation rate in the US is the highest in 39 years, crypto market jumps modestly
Bitcoin price evolution in the last 24 hours, data from CryptoMarkets

In accordance with CNBC, other markets also reacted positively to the news, including Stock indices on Wall Street that rose. On the other hand, government bond yields fell after the reports.

As seen on previous occasions, it appears that the news of inflation increased investors’ appetite for risk. After the release of the October CPI data, Bitcoin It skyrocketed nearly $ 3,000 to quickly hit a new all-time high of $ 68,950. Although at that time the rise was quickly reversed and the asset has been in a downtrend ever since.

The cycle seemed to repeat itself as the positive effect on the digital asset market was short-lived. At the time of publishing, the red numbers predominate in the market, with most of the major cryptocurrencies seeing prices down. According to data from CryptoMarkets, Bitcoin is currently around USD $ 48,000 while Ethereum registers a fall of almost 4% to settle at USD $ 4,000.

Inflation rate in the US is the highest in 39 years, crypto market jumps modestly
CryptoMarkets

Other cryptocurrencies like Solarium (SUN), Binance Coin (BNB) and Cardano (ADA) are also trading lower with percentage losses of up to two figures in the last week. The total capitalization of the crypto market is USD $ 2.24 trillion, with a decrease of 2% in the last 24 hours, according to CoinMarketCap.

Lennard Neo, analyst at Stack Funds, had already anticipated that the bullish reaction would be momentary and considers that the next announcements of the FED could give better clues for the evolution of prices in the crypto market. CoinDesk he quoted it:

I think the Bitcoin surge was more of a knee-jerk reaction and probably won’t hold. We expect more side trading as eyes shift to the central bank meeting next week.

Bullish Forecast For Crypto As Inflation Rises

The United States has printed 35% of total US dollars in circulation in 2021 alone, which has played a key factor in record inflation, as highlighted Cointelegraph.

This increase in the supply of fiat currency in response to the crisis generated by the pandemic has motivated investors to resort to Bitcoin as a hedging asset; mainly due to its nature outside of government control and limited supply. Hence, the largest cryptocurrency registers an annual increase of almost 70% this 2021.

See also  Economist Nouriel Roubini revealed that he is working on a project for the launch of a new "tokenized dollar" - DiarioBitcoin

In general, digital currency market watchers expect more price fluctuations as inflation rises and the new variant of the coronavirus, Ómicron, causes concerns in the traditional financial market.

In this regard, the analyst of Quantum Economics, Jason Deane, anticipates a long-term price increase for Bitcoin and gold as the purchasing power of the US central bank declines. “The Fed has no real tools to try to combat it and is effectively tied up with the rest of us.“, Commented on inflation to CoinDesk.

Meanwhile, the finance guru and author of ‘Rich father poor father‘, Robert Kiyosaki, also took the opportunity to warn his followers on Twitter that a “collapse” Y “depression”Economical. As on previous occasions, he advised taking refuge in assets such as Bitcoin, precious metals and real estate; although he warned that these will also fall in the midst of the anticipated crisis.


Recommended reading


Article by Hannah Estefanía Pérez / Daily bitcoin

Image from Unsplash

See also  Emery's Villarreal could end up as one of the highest scorers in history

Leave a Comment

Your email address will not be published.