Bitcoin Value Takes A Hit As U.S Inflation Rises
March 16 2022 - 10:00AM
NEWSBTC
The recent acceleration in the United States Consumer Price Index
for February has come at just the right time with matching
expectations. The index is at 7.91%. It was expected to peak during
Q1 and remain elevated throughout this year. Even though it might
not have a big impact on prices, the Federal Reserve and other
central banks are trying to make monetary policy tighter so that
people will believe they can keep prices stable. Related Reading |
Gloomy Crypto Future? Book Author Warns We’re In The Biggest Bubble
In History The price of bitcoin had decreased since December when
the 10-year yield rose, and credit became more expensive. Reviews
On Market Inflation People in the credit market understand
inflation is here to stay. This means that rising interest rates
are going to continue. As credit instruments sell, this causes
interest rates to go up. This makes it harder for people to afford
things. Dylan LeClair, senior analyst and Co-Founder of
21stParadigm, said; Fixed income doesn’t react well to
(accelerating) inflation at four decade highs, who would’ve
thought? Higher rates in a historically over-indebted economy; the
market is doing the Fed’s hike cycle for them. Things are
likely going to break faster than most think. Furthermore, we have
increasing financial conditions, and an unwind in leverage (in
legacy markets as bitcoin derivatives are already de-risking). On
this point, LeClair tweeted; Fixed income getting murdered over the
last three months. Accelerating inflation and slowing growth across
the board. A gradual then sudden process of declining liquidity as
deleveraging process continues. BTFD conditions across markets has
turned into “sell the rip”. The end of this regime will likely be
marked by the liquidity crisis in legacy markets, which probably
has a net negative impact on the bitcoin price followed by a pivot
back towards quantitative easing and, ultimately, yield curve
control from central banks. Related Reading | Hedge Fund Holdings
Fail To Prop Up Bitcoin Price Regardless of what happens with the
global economy, blockchain has continued to prove its usefulness.
The case for a non-sovereign scarce digital monetary asset has
never been stronger, and investors should embrace this new trend
before it’s too late. Crypto Market Insight In the past 24 hours,
cryptocurrency prices have been relatively calm. Yesterday’s US
markets dive was in reaction to fresh inflation figures that showed
prices rising at an annual rate of 7.9% over the past three months
and raising fears about future tightening from monetary
policymakers across Europe, Asia, and America – with all eyes fixed
on when they will tighten their own purses. The top ten
cryptocurrencies were all relatively stable, with only a few
showing 1% or fewer movements. Among these was Avalanche, which
gained 2%. Finally, Polkadot is adding 5%, making it the first time
in quite a while that we’ve seen growth this high. Bitcoin added
1.08% to its value. Featured image from Pixabay, chart from
Tradingview.com
Avalanche (COIN:AVAXUSD)
Historical Stock Chart
From Aug 2024 to Sep 2024
Avalanche (COIN:AVAXUSD)
Historical Stock Chart
From Sep 2023 to Sep 2024