The US consumer price index (CPI) has reached a peak of 6.8% this year. Inflation reports appear to favor the price of Bitcoin, albeit only for a moment.
The inflation rate in the United States keeps rising at a rate not seen in nearly 40 years, according to the latest official reports.
The US Department of Labor highlighted this Friday that inflation reached its highest level since 1982. The federal agency said that the Consumer Price Index (CPI), which measures the cost of a large basket of goods and services, has risen 6.8% in the last 12 months. The figure is the highest since the 1980s when inflation sustained a rate of 6.9%.
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 does not include food and energy prices, has reached a peak of at least 4.9% compared to the previous year, representing the steepest rebound since mid-1991.
As reported by several news outlets, the latest figures got adjusted with the predictions of some analysts. Various economists interviewed by Reuters had forecast that the CPI would reach a peak near 0.7% and rise 6.8% year on year. However, the inflation rate remains higher than the rate set by the US Federal Reserve (FED) of 2%.
Bitcoin Touched $ 50,000 Momentarily
News of increasing inflation in the US brought many advantages for the digital currency market, which showed a momentary rebound after the reports. Bitcoin soared to near $ 2,000 to regain the $ 50,000 mark while other vital cryptocurrencies also spiked amid the announcements.
According to CNBC, other markets also received positively the news, including rising Wall Street stock indices. On the other hand, government bond yields crumbled down after the reports.
As seen on previous occasions, it appears that the news of inflation increased investors’ interest in risk. After the launch of the October CPI data, Bitcoin approached a peak near $ 3,000 to hit a new all-time high of $ 68,950. Although at that time the rise got reversed and the asset has been in a downtrend after this event.
The cycle appeared to be repeating itself as the positive effect on the digital asset market was short-lived. A few days ago, the red numbers predominated in the market, with most of the major cryptocurrencies seeing prices down.
On November 10, after the October figure reached its highest in the last three decades, the price of bitcoin climbed above $ 68,000 and the cryptocurrency got recognized as a solution to protect against inflation.
This investment method takes effect due to the fact that bitcoin has a limited supply of coins. The people who join the network, how much its value increases, or how advanced the equipment mining it is, does not matter; there will never be more than 21 million BTC. It is unknown what effect this new record will have on the price of bitcoin on US inflation.
By: Jenson Nuñez
