Bitcoin price is down nearly 9% after the US Consumer Price Index (CPI) inflation report came in higher than expected. It slid to $20,389, while Ethereum slipped to $1,599 after it lost 6.27% in the last 24 hours.
The CPI came in higher than expected but it appears to be on the right side. Data shows that the inflation index increased 8.3% over the previous year, and the energy prices component fell 5% in the same period. The report also prompted the US equity indices to fall. The tech-heavy Nasdaq Composite Index futures slipped 3.6% in 30 minutes. The broader crypto market also took a hit. The altcoins have recorded significant losses. Solana is the biggest loser, it lost 11.12% of its value in the last 24 hours. Avalanche is down by 8.95%, Polygon MATIC 7.62%, XRP 5.03%, and Polkadot lost 4.58%. The BTC price drop shows that it is not the best hedge against inflation as it’s touted to be. Investors say Bitcoin’s fixed supply would be looked upon favorably by those looking to preserve their wealth from erosion by a general increase in prices.
While the topmost cryptocurrency is trading 69% below its all-time high of $68,721 (recorded in 2021), on a three-month price view it is still very much in the rangebound territory. Bitcoin is still very much at the $20,000 mark – the most psychological importance level to hold. But Raghu Yarlagadda, the co-founder and CEO of FalconX, says the cryptocurrency market is struggling right now. He highlighted that the August CPI which economic observers had expected to plunge to 8.1% offers the latest evidence that inflation remained a threat to the US economy. Yarlagadda said the Federal Reserve would be more inclined to raise interest rates a third consecutive time by 75 basis points at its Federal Open Market Committee meeting (FOMC) next week. The executive pointed out that the Fed was very clear that it was going to fight inflation first then prioritize the soft landing.