TL; DR
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After breaking $50,000 on Monday, BTC fell back to $48,550 following a higher-than-expected CPI print (3.1% vs. 2.9%), raising fears of further rate hikes.
Full story
“I would have gotten away with it too, if it hadn’t been for those meddling inflation figures.”
– the price of Bitcoin (if it somehow becomes aware and starts commenting on crypto news publications in the style of a Scooby Doo villain).
Confused? You should be too. This is what’s going on…
After rising to $50,000 on Monday, Bitcoin quickly fell back to $48,550 (the gold level) yesterday morning, and it was all thanks to some extra spicy Consumer Price Index (CPI) data – aka “the average cost of daily living” named. articles” data.
Can you guess when the CPI data was released? 👇
Would you like more details?
“Details? That’s where the devil lives, no thanks.”
– you probably.
Well, you get them anyway:
The CPI was expected to rise 2.9% year-on-year, but instead ended up higher, at 3.1% – which doesn’t sound like much, but +0.2% is enough to scare the wrong people nervous (like Federal Reserve Chairman Jerome Powell).
The market now fears that the following will happen:
J-Powell panics as inflation increases → instead of to lower interest rates as previously planned (making loan/credit repayments cheaper for everyone and giving us all more disposable income), JP is increasing them.
The idea is that an increase would leave society as a whole with less money to spend, which should lower prices and fight inflation, so:
On the retail side — Companies should lower their prices to attract shoppers.
As for the financial markets – lower prices will lead to lower income, will lead to lower investments, will lead to lower crypto/stock/house prices.
Okay, now you know!