The US Consumer Price Index (CPI) reached a new four-decade high in November at 6.8%, confirming what market experts have been calling all along.
Asian and European markets were lower today in the early morning ahead of the data release and the US government’s plans to introduce new measures to contain the damage.
The main reason for the rise in inflation was the printing of unused money by governments all over the world, and conditions were further worsened by the epidemic.
During the first coronavirus wave, the traditional and cryptocurrency markets initially declined, but later Bitcoin and altcoins found a foothold and grew exponentially.
Bitcoin has left gold behind to become the growing choice of inflation hedge among institutional and retail investors alike.
In fact, the coronavirus played a major role in institutional adoption of Bitcoin at the beginning of this year.
The mutant “Omicron” alternative to COVID is starting to spark fear in traditional markets, and market experts predict another tough quarter for financial markets.
Can Bitcoin Overcome Inflation Fears?
The majority of market experts believe that inflation will wipe out every market including the cryptocurrency market.
However, crypto proponents point out otherwise, with many crypto market analysts predicting a rally in Bitcoin and other cryptocurrencies in the first quarter of 2022 as December turned bearish once again.
Even when the traditional market slipped, Bitcoin and altcoins quickly recovered once the CPI data was released yesterday.
Bitcoin price jumped to $49,000 from a daily low of $47,236, Ethereum price also recovered above $4,000 after falling below $4,000 at the beginning of the day.
At the time of writing, Bitcoin has consolidated further above the $48,000 level, but the bearish trend was more dominant in the market especially after the release of the CPI data.
Currently Bitcoin is looking to consolidate and regain some bullish momentum as the new year approaches.
IMF demands comprehensive cryptocurrency market regulations
Bitcoin and Ethereum incur heavy losses during the week as the market continues to decline