The U.S. Department of Labor today released the U.S. consumer price index, announcing a 4.2% increase from April 2020 to last month. Has Bitcoin offered a safe haven from inflation?
The inflationary monster is a reality, how does the crypto market react?
Since the onset of the COVID-19 pandemic and, with it, the economic response of the United States, alarms and warnings were raised about a possible inflation that would undermine the value of the US dollar. And, consequently, Bitcoin gained popularity as inflationary fears clung to society.
In this sense, today the U.S. Department of Labor published the figures of the consumer price index (CPI). It is worth briefly explaining that CPI is an indicator that measures the change in prices of a basket of goods and services in a particular place over a certain period of time.
Therefore, when the United States reports a positive annual change in CPI of 4.2%, it ultimately means that the prices of goods and services that make up the basket have increased by 4.2%.
And, as we know, CPI is an indicator to measure a country’s inflation. In addition, rising fears turn out to be the fastest price increase the United States has seen since 2008.
As a result of this pressure, the S&P 500, Dow and NASDAQ experienced significant drops on Wednesday and closed the trading day with a drop of 2.14%, 1.99% and 2.67% respectively.
And, while Bitcoin has stood out as an excellent haven of value, the leading crypto dropped 7.77% over the past 24 hours following news on US inflation. In fact, the general crypto market have been stained red. Major cryptocurrencies Ethereum, BNB, Dogecoin and Cardano faced drops of 1.85%, 6.06%, 10.5% and 5%, respectively.
We want to know your opinion! Is Bitcoin the safe haven from inflation?
Crypto regulatory pressures by the SEC are costly
According to a report by Cornerstone Research found that the U.S. Securities and Exchange Commission (SEC) earned $ 1.77 billion in crypto fines.
According to the research, the SEC was one of the leading regulators in enforcing crypto regulations. Consequently, its activity resulted in $ 1.77 billion in fines to crypto firms.
Specifically, he initiated 75 enforcement actions against crypto companies and individuals. This runs from July 1, 2013 to December 31, 2020.
Ethereum won’t beat Bitcoin, says Stan Druckenmiller
Billionaire investor Stanley Druckenmiller appeared on CNBC where he warned crypto investors that the US dollar could lose its reserve currency status. In this regard, he believes his replacement is between any crypto projects that may arise and Bitcoin.
He therefore explained that “it’s going to be very difficult to unseat Bitcoin as a store of value... because it has a 14-year mark and there is a finite supply». But, in addition, the billionaire does not believe that Ethereum has what it takes to beat Bitcoin.
In a few lines…
- The US SEC issued a statement urging crypto investors to beware of the Bitcoin futures market.
- Crypto analyst Scott Melker demonstrates his concern over the speculative rise in the price of Dogecoin and Shiba Inu.