The latest CPI figures caused a kneejerk reaction from the traditional and crypto markets, but the skies are looking clearer now that the market had some time to digest January’s inflation data. Covered: January CPI Numbers Bitcoin Reacts To Inflation Data RECOMMENDED: FOUR TRILLION DOLLAR ASSET MANAGER SAYS BITCOIN IS SUPERIOR MONEY January CPI Numbers […] The post CPI Data Dumps Then Pumps The Crypto Market appeared first on CryptosRus.

CPI Data Dumps Then Pumps The Crypto Market

The latest CPI figures caused a kneejerk reaction from the traditional and crypto markets, but the skies are looking clearer now that the market had some time to digest January’s inflation data.

Covered:

  • January CPI Numbers
  • Bitcoin Reacts To Inflation Data

RECOMMENDED: FOUR TRILLION DOLLAR ASSET MANAGER SAYS BITCOIN IS SUPERIOR MONEY

January CPI Numbers

This morning, the Federal Reserve shared details on the latest consumer price index (CPI) inflation numbers, which reached a 40-year high at 7.5% year-over-year, up from 7.0% last month.

An official report from the Bureau of Labor Statistics (BLS) shows the month-over-month increases in inflation we’ve seen throughout 2021. I guess it’s not just the Bitcoin price that’s ‘up only.’

It appears that the inflation numbers won’t be slowing down either. The pandemic’s exacerbation of our monetary stimulus, combined with a shortage in labor markets and backed-up supply chains, has created a lot of stress on consumers’ wallets. And until the Fed can manage a way to slow down spending while also getting macroeconomic stressors under control, expect the money printer to keep chugging away.

RECOMMENDED: CRYPTO ADOPTION SURGING THROUGHOUT THE WORLD AS INFLATION CONCERNS GROW

Bitcoin Reacts To Inflation Data

Upon the news of rising inflation, investors got spooked out of their risk-on positions for a brief moment before turning right back around again. Take a look at the wild moves Bitcoin is moving right now:

At the time of writing, Bitcoin (BTC) is trading just over $45,000.

It’s true that inflation is bad news, however, investors like to use this virus in our monetary system to their advantage — when the money printer turns on, scarce assets rise in value. A lot of people seem to forget this principle, but Bitcoin was designed with a fixed supply of 21 million tokens, making it the perfect choice for hedging monetary debasement.

Aside from the most recent sell-offs we’ve seen in traditional markets, it’s rather telling that the stock market has been grinding to record highs throughout one of the most highly inflationary environments we’ve seen since the ’80s.

On a long-term time horizon, it’s blatantly obvious that no other asset in history has better protected the individual from inflation than Bitcoin, as it sits on top of over 400,000,000% gains since inception. However, macroeconomic uncertainties have been sending the markets on a rollercoaster in recent months, and it’s not just Bitcoin that’s served as an inflation hedge; people are throwing their money into just about everything these days to escape inflationary pressures, as FTX founder Sam Bankman-Fried pointed out a couple of weeks ago.

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