Bitcoin and crypto fell 4% and reached a low not seen since July 2.
Concerning the US government’s Consumer Index Price (CPI), annual inflation for September was 8.2%, which is higher than the 8.1% average estimate on Wall Street. Core inflation, which excludes food and energy, increased 6.6% from a year ago, which is the highest amount since 1982.
Regarding the data, inflation is becoming more difficult to control despite several interest rate increases by the Federal Reserve this year that have hurt stocks and cryptocurrency prices.
With reference to cryptocurrency indexer CF Benchmarks, Bitcoin dropped to $18,195 shortly after the CPI report. It is currently trading at roughly $18,400, down 4% in the last 24 hours, according to Yahoo Finance data.
According to Singaporean cryptocurrency firm QCP Capital, when inflation has come in higher than consensus projections this year, Bitcoin has decreased by an average of 4% in the 30 minutes after the economic release.
The biggest cryptocurrency last month experienced a 5% decline in value within an hour of the release of the August inflation data. In May, it decreased by as much as 7% following the CPI reading for April.
Since then, Bitcoin has bounced back and is currently struggling to hold onto a $18,000 floor that it has maintained since the start of July.
Since the beginning of September, when McMillan’s team was concerned that Bitcoin could drop to $12,000 to $13,000 per coin as Bitcoin mining firms came under pressure and wanted to dump their coins, the majority of the asset manager’s allocation to cryptocurrencies has been resting in cash.
The second-largest cryptocurrency, Ether, has lost 5.5% over the past day and is trading above $1,200 per coin, while Coinbase Global (COIN), the only publicly traded cryptocurrency exchange, saw an 11% drop in share price on Thursday morning following the announcement.
According to Mike Novogratz, founder and CEO of big crypto investment management Galaxy Digital, the situation won’t get better anytime soon for cryptocurrencies, which lost more than half of their value between April and July of this year.
The total market value of digital assets as calculated by Coinmarketcap as of Thursday morning has fallen below $900 billion, down 4% from $923 billion to $881 billion beginning hours before the CPI report.
Over the previous two months, the value of Bitcoin has dropped steadily, but year to date, it has lost more than 61% of its value, roughly twice as much as major stock indices.
