Bitcoin Balloon 2 Andriy Onufriyenko
Minutes after US inflation data revealed that prices are increasing at an unprecedented rate, Bitcoin reached an all-time record high.
Bitcoin reached an intraday high at $69,000. This represents a 4.6% increase from the time CPI data were released.
Craig Erlam, Oanda stated that while I have never believed that bitcoin was an inflation hedge, it is clear that today's narrative is still being supported.
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Bitcoin hit a new record high Wednesday, just moments after US inflation data revealed that prices are growing at an unprecedented rate.
At 9:15 AM, the price of the coin reached an intraday high at $69,000 Based on Coinbase data, Wednesday's ET was 4.6% higher than the 8:30 a.m. ET. ET was the time that the Consumer Price Index was published. Bitcoin traded at $65,951 prior to the publication of the data.
Bitcoin lost those gains and traded 1.46% higher at $68,393 at 10:30 AM. ET.
New CPI data showed that prices rose at an increased pace in October. This raised concerns about inflation well into 2022. Bitcoin rallied in response to the CPI data, which showed a rapid increase in prices. This is due to its 21 million-strong fixed supply.
The long-standing belief of Bitcoin bulls is that the token can't be devalued in any government institution because it is decentralized and cannot be produced more.
CPI, a key indicator of national inflation, rose 6.2% year-over-year. This is the highest annual inflation rate since 1990. CPI rose 0.9% in Oct, more than the 0.6% predicted by Bloomberg economists.
However, bitcoin did not always respond to inflation by soaring in price. After a strong inflation reading in July, bitcoin plunged. In May, bitcoin plunged 7% after strong inflation readings.
Craig Erlam (senior market analyst at Oanda), stated in a note that while I have never supported the idea that bitcoin could be used as an inflation hedge, it is clear that the narrative is still sticking. This could be a good sign for the near future, as inflation data could get worse before getting better.
Other cryptocurrency are also experiencing record highs. The market capitalization for all crypto markets is now at $3 trillion, which is the highest level since the beginning of this week.
Gold, another inflation hedge edged higher by as high as 1.91% at $1,852.65 an ounce on Wednesday