TL; DR
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~$100 billion was wiped from the crypto market before being (largely) recovered after February’s CPI print was 3.2% instead of 3.1% (seriously, that’s all it took).
Full story
Welcome to Web3 Daily, where we stare at crypto charts all day so you don’t have to!
At least that’s the excuse we make for ourselves.
(According to one therapist, it could actually be considered “obsessive behavior” that “puts enormous strain on our relationships.”)
…but what does Dr. know? Stevens – she doesn’t even own crypto.
Anyway…
When we looked at the charts yesterday, we witnessed a rapid/violent dip, wiping out ~100 billion dollars from the crypto market in ~1 hour, following the release of the February Consumer Price Index.
(Also ‘CPI’. In other words ‘how much more expensive has everything become in the past twelve months?’).
Here’s a quick overview of how it all happened and why:
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Everyone expected the CPI to be up 3.1% since this time last year, but it ended up at 3.2%
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This fueled fears that interest rates would be kept higher for longer, putting pressure on the economy.
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The longer interest rates remain high, the less likely we are to have a ‘soft’ landing (aka lowering inflation without entering a recession).
All of that happened in the space of 1 to 2 hours, wiping out ~100 billion dollars from the crypto market before (mostly) regaining it…
And all because of a 0.1% difference in the expected CPI.
Economics, okay?