Bitcoin Steadies Above $45k, US Inflation Comes In At 7.5% Year Over Year
February 10 2022 - 1:21PM
NEWSBTC
Bitcoin price recovered to within $45k after sliding below $44k as
analysts indicated probable swings for the flagship cryptocurrency.
The release of US inflation rates seems to have had no effect on
the king cryptocurrency. Bitcoin’s price rose past a crucial
barrier overnight Wednesday, reaching $45,300, before falling as
the broader market dipped in early trades after US markets opened.
Bitcoin Unaffected By Inflation Rates Over the last 24 hours,
BTC/USD has moved in a range of $43,402.81 – $45,398.91, exhibiting
high volatility. Trading volume has climbed by 16.21% to $28.8
billion, while the overall market cap is around $860.47 billion
dollars, leading in a 42% market dominance. As investors analyzed
new US inflation data, which came in at 7.5% year-over-year vs an
expected 7.3%, the earlier decline took shape. Risky assets like
crypto and equities have reacted negatively, with all eyes on the
Federal Reserve’s upcoming rate hike in March. BTC/USD steadies
above $45k. Source: TradingView Despite being 0.2% higher than
predicted, rising inflation did not have the same favorable impact
on risk assets like Bitcoin as it had in recent months. The S&P
500 fell 0.23%, the Nasdaq composite fell 0.18%, and the Dow Jones
Industrial Average remained barely above the flat line. According
to analysts, the Federal Reserve may now have additional motivation
to begin raising interest rates sooner due to the speed of
year-over-year price increases. Crypto trader and analyst Michael
van de Poppe observed: “The Consumer Price Index (CPI) results for
the U.S.A. are coming in at 7.5% year-over-year, the expectations
were 7.3% year-over-year.$DXY is shooting up and risk-on assets are
dropping down like Bitcoin & equities.Likelihood that the FED
will start rate hikes in March.” However, for economist Lyn Alden,
it was cash savers who had been losing the most from inflation. she
noted alongside a chart: U.S. CPI vs. effective federal funds rate
chart. Source: Lyn Alden/ Twitter “Official inflation currently has
its biggest gap over short-term interest rates since 1951. People
holding cash in a bank or T-bills over the past year lost over 7%
of their purchasing power.” Related article | Investors Take Refuge
In Bitcoin As Inflation Rises BTC Will Hit $50k In Short term The
Fed will be put to the test here, as they had hoped for a steady
tightening cycle rather than a hasty tightening that would appear
to be a policy blunder. The political pressure on the Biden
administration and Democrats will increase as core inflation rises
over the Fed’s objective and real average hourly earnings fall.
Although November is still a long way off, this inflation report
shows that price hikes are everywhere, and there is rising
opposition to new fiscal stimulus measures that would exacerbate
pricing pressures. As investors predict that pricing pressures may
be peaking just before the Fed’s March policy meeting, US stocks
have regained most of their inflation-related losses. Given the
rise in global bond yields, Bitcoin prices are holding up well.
Bitcoin’s optimal future environment is risk appetite, which may be
tough to achieve until after the Fed’s first couple of rate hikes.
Institutional investors in Bitcoin are focusing on Treasuries
because the momentum trade appears to be quite simple. For the
short term, Bitcoin appears to be settling in between $40,000 and
$50,000. Cameron Winklevoss, co-founder of Gemini, feels Bitcoin is
still the best inflation hedge, corroborating thoughts from the
crypto community and even mainstream investors. Inflation hit 7.5%
in January. Highest in four decades. It continues to accelerate.
The best way to shield yourself from this pernicious, silent tax on
your life’s work — your blood, sweat, and tears — is bitcoin. —
Cameron Winklevoss (@cameron) February 10, 2022 Related article |
Bitcoin Aims For $48K? BTC Reacts Upward To U.S. Inflation Report
Featured image from iStockPhoto, Charts from TradingView.com
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