For the month of June 2022, the US Bureau of Labor Statistics published its Consumer Price Index. The Negative CPI was found to be 9.1%, the largest inflation increase in the US in the previous 40 years. The Federal Reserve’s monetary policy is determined by the CPI, which is a reliable indicator of inflation.
Negative CPI Report Causes Bitcoin To Tumble
Prior to the release of U.S. inflation statistics on July 12, the price of Bitcoin (BTC) settled into a solid holding pattern, which ultimately added more negative volatility.
According to the latest CPI report for June, inflation in the United States reached 9.1%, which is the highest level since November 1981. This news only served to accelerate the downward trend in Bitcoin and the cryptocurrency market.
Following the release of the CPI, BTC falls by around 4% within ten minutes. Traditional market gauges like the S&P 500, Dow Jones, and NASDAQ are all sharply lower.
According to TradingView data, Bitcoin is currently trading at $19,180, down 3.45% on the day and 4.70% for the past week, with a total market cap of $366 billion. Notably, the flagship digital asset lost $15 billion from its market capitalization, dropping from $379.91 billion to $364.55 billion.
Bitcoin market cap at $374 Billion. Source: TradingView
The CPI for the previous month revealed an increase in inflation of 8.6% year over year, the highest level since 1981. The Fed implemented quantitative tightening monetary policies in response to extremely high inflation.
The entire crypto industry saw a severe downturn as a result of the Fed’s hardline monetary policy. The last ten years’ worst financial quarter for Bitcoin was experienced.
Related Reading | Wall Street Investors Expect Bitcoin To Hit $10,000, Is This Possible?
This revelation may have severe effects for the cryptocurrency markets, if last month’s CPI is any indicator.
Investors took a collective deep breath as the time for the release of the inflation statistics ticked down. The global markets remained calm, but as many prominent crypto trading analysts had hinted at the start of the week, an announcement—positive or negative—would be said to have a significant impact on the price of digital assets.
The United States Federal Reserve will be under even more pressure to raise interest rates as a result of the inflation statistics, which was much higher than expected.
More Pressure
Since Bitcoin has so far been unable to act as an inflation hedge, it has…
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