After US inflation data revealed that prices experienced the fastest increase in the last 30 years, bitcoin It hit an all-time high on Wednesday.
The price of the leading cryptocurrency, Coinbase It rose as high as $69,000, according to data, and was up 4.6% after the time the Consumer Price Index was released. Before the data was released, Bitcoin was trading at $65,951. Bitcoin has cut these gains for now and is trading at $68,393.
Fresh CPI data, which showed prices soaring in October, raised concerns that inflation will be an issue through 2022. Often touted as a hedge against inflation due to its limited supply of 21 million, Bitcoin has been on the rise.
Bitcoin bulls have long said that due to its decentralized nature and limited supply, the token cannot be devalued by any government agency. The CPI, an important measure of nationwide inflation, increased 6.2% year-on-year, recording the fastest annual inflation rate since 1990. CPI rose 0.9% in October, higher than the 0.6% forecast by economists at Bloomberg.
Besides, Bitcoin has not always reacted to inflation with a price increase. In July, Bitcoin crashed after a strong inflation spike. Also in May, Bitcoin fell 7% on the day CPI data revealed that prices had risen at the highest rate since 2008. “I never disagreed with the suggestion that bitcoin is an inflation hedge, but today it’s clear that the narrative continues,” Craig Erlam, senior market analyst at currency firm Oanda, said in a note.
“And if the narrative is indeed true, that could bode well in the near-term as inflation data could get worse before it gets better.”
The market cap of the entire crypto market exceeded $3 trillion for the first time this week, as other cryptocurrencies hit record highs. Gold, another inflation hedge asset, rose as much as 1.91% on Wednesday to reach $1,852.65 an ounce.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.