Hot inflation report cools the price of bitcoin, but not for a long time

The US consumer price index rose more than that What was expected In January – 0.5 % a month per month compared to an estimate of consensus of 0.3 % – indicating that the country is not outside the forest with inflation. Along with the total stock market, the report brought Bitcoin The price drop decreased, with the price drop to about 94,000 dollars after the report was issued, although it has been recovered since then to 95500 dollars from 11:15 am.

Bitcoin decrease today is also reviving the old debate About whether bitcoin or not is the hedge of inflation.

Historically, consumer price index reports were not in fact a little effect on bitcoin price. A Coingecko The analysis found that “low price or rising regardless of the direction of the transformation of the inflation rate.” Note the report:

“For example, when the consumer price index report showed a decrease from 8.5 % to 8.3 % (annual) between March and April 2022, the Bitcoin price decreased by -11 %. The opposite, the Bitcoin price increased by 9.68 %, after the consumer price index report shows a decrease In inflation from 8.2 % to 7.7 % (annual) between September and October 2022. “

The inflation report also indicates that the Federal Reserve may not reduce interest rates or as soon as possible.

“This will not only lead to tremendous psychological damage to investors, but the market is likely to have a negative reaction to the knee to the increasing risks of the extended increased or even higher than that, so caution justifies.” The information manager at Northlight Asset Management said.

So what does Bitcoin mean?

Alan Orwick, the founder of the Quaii network, told Sherwood News that the report, which proposes a more strict monetary policy, led the sale. “However, there is optimism for apostasy if inflation cools or liquidity returns to the market,” he said. “This reaction is an equation for BTC’s narration as an influation.”

Other experts have chanted a feeling, noting that the possibility of lowering interest rates in the United States anytime soon faded, and bitcoin is almost completely linked to risk assets.

Nick Bokerin, financial analyst and founder of the column office, said that although Bitcoin was designed to be a hedge against inflation, its adoption by some of the world’s largest institutions means that they are moving with the stock markets.

“However, tomorrow, we will likely see the stability of Bitcoin as their owners benefit in the long term from declining to buy in the best long -term store currently available.”

On the contrary, some believe that this is a harbinger of further pressure for bitcoin in the foreseeable future.

Jim Flint, founder of the Local Research Group and the former CRO of the Texas Blwchin Council, said that in order for Bitcoin to rise much higher, there are usually two main steps. First, it is unlikely that the cutting rates of federal reserves are unlikely, which is very unlikely due to the consumer price index today. “Second, quantitative relief, or, he said better, print money,” he said. “This morning report pays both these two steps further.”

Yaël Bizouati-kennedy is a financial journalist written for Download Jones, The Financial Times Group, and Business Insider.