Flagship cryptocurrency asset, Bitcoin now trades at new All-Time Highs (ATHs) as latest United States Labor Department report reveals that in the 12 months through October the consumer price index (CPI), increased by 6.2%.
U.S. consumer prices increased more than expected in October as the cost of gasoline and food surged, leading to the biggest annual gain since 1990. This also gives signs that inflation could remain uncomfortably high well into next year amid grumbled global supply chains.
According to the Labour Department report, the CPI rose 0.9% last month. This comes after gaining 0.4% in September. In the 12 months through October, the CPI has now accelerated 6.2%. This represents the largest year-on-year advance since November 1990, following the 0.4% jump to 5.4% in September.
What you should know
Upon hearing the news, Bitcoin quickly snapped its descending movement and rallied into all-time highs which currently stands at $68,789.63. This was created almost an hour ago.
The cryptocurrency market capitalization is also seeing a surge as altcoins rally alongside Bitcoin. The market capitalization is currently up 1.42% to currently stand at $2.96 trillion. The market capitalization will be making another attempt to breach the elusive $3 trillion market capitalization which according to coinmarketcap, has not been reached yet.
Ether, the native token of the Ethereum blockchain is also trading at new heights, with an ATH of $4,851.98, also created along side Bitcoin as investors are scrabbling for an edge against inflation. Gold is also bullish by 1.70%, currently trading over $1,860.
However, major indexes in the United States’ exchanges including the New York Stock Exchange (NYSE), the NASDAQ and the S&P500 are all down as investors sell of stocks to flee to assets that are considered inflation edge such as Bitcoin and Gold.
The CPI report comes a day after producer prices data showed a solid rise in October and highlighting the extent to which manufacturers were passing on higher costs to consumers, whose spending accounts for 70% of the U.S. economy.
What they are saying
Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey, stated, “Even though the Federal Reserve believes that inflation is transitory, the evidence is starting to add up that that’s not true. The Fed has made very few moves outside of what they’ve told the markets they plan to do, but I think even they’ve got to be a little concerned by the strength of the increase.”
Thomas Hayes, managing member, Great Hill Capital LLC, New York speaking on the stock market decline stated, “It is just a natural breather. The markets moved quite a bit in a short period of time off at September lows.”
Joe Pompliano stated, “BREAKING: Inflation is up 6.2% year-over-year. That’s the highest increase in 31 years. Economists & politicians claimed inflation was non-existent, transitory, and even that it was good for you. Meanwhile, your purchasing power was being reduced at a historic rate — wake up.”
With a volatility squeeze taking effect, Bitcoin leaving exchanges at record levels, a Taproot upgrade in the coming days, and now fears of inflation, Bitcoin is expected to trade at even higher levels, especially now that investors will be looking for an edge against an ever-increasing inflation rate.