Bitcoin recovers when the United States declares its worst inflation in 41 years
Bitcoin surpassed $20,000 on Thursday morning in Asia, after a precipitous 3.4 percent decline within an hour in response to the United States’ announcement of its strongest inflation rise in 41 years.
Inflation levels in the United States rose 9.1 percent in June compared to the same month a year ago, according to the most recent Consumer Price Index report released on Wednesday. This indicates that aggressive interest rate hikes by the U.S. Federal Reserve have done little to curb rising prices thus far.
This constitutes the largest monthly increase since 2005, as the continuing conflict in Ukraine and supply chain bottlenecks in China add to increased consumer costs.
The Federal Reserve was anticipated to increase interest rates by an additional 75 basis points this month, but the Fed may contemplate a more aggressive stance in light of soaring inflation.
All of the top 10 cryptocurrencies on CoinMarketCap were in the green this morning in Asia, recovering from a steep decline after the news.
The Dow Jones Industrial Average, S&P 500 Index, and NASDAQ Composite Index all ended with losses of less than 1 percent, while the NASDAQ Composite Index lost just 0.15 percent.
Bitcoin, which was long seen as a hedge against inflation, has been trading similarly to a risk asset this year, dropping 55 percent of its value.