TL; DR
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After breaking $50,000 on Monday, BTC fell back to $48,550 following a higher-than-expected CPI print (3.1% vs. 2.9%), raising fears of further rate hikes.
Full story
“I would have gotten away with it too, if it hadn’t been for those meddling inflation figures.”
– the price of Bitcoin (if it somehow becomes aware and starts commenting on crypto news publications in the style of a Scooby Doo villain).
Confused? You should be too. This is what’s going on…
After rising to $50,000 on Monday, Bitcoin quickly fell back to $48,550 (the gold level) yesterday morning, and it was all thanks to some extra spicy Consumer Price Index (CPI) data – aka “the average cost of daily living” named. articles” data.
Can you guess when the CPI data was released? ????
Would you like more details?
“Details? That’s where the devil lives, no thanks.”
– you probably.
Well, you get them anyway:
The CPI was expected to rise 2.9% year-on-year, but instead ended up higher, at 3.1% – which doesn’t sound like much, but +0.2% is enough to scare the wrong people nervous (like Federal Reserve Chairman Jerome Powell).
The market now fears that the following will happen:
J-Powell panics as inflation increases → instead of to lower interest rates as previously planned (making loan/credit repayments cheaper for everyone and giving us all more disposable income), JP is increasing them.
The idea is that an increase would leave society as a whole with less money to spend, which should lower prices and fight inflation, so:
On the retail side — Companies should lower their prices to attract shoppers.
As for the financial markets – lower prices will lead to lower income, will lead to lower investments, will lead to lower crypto/stock/house prices.
Okay, now you know!