The US Department of Labor released the US Consumer Price Index today, announcing the 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 beginning of the COVID-19 pandemic and, with it, the economic response of the United States, alarms and warnings have been 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 United States Department of Labor published the figures of the consumer price index (CPI). It is worth briefly explaining that the CPI is an indicator that measures the variation in the prices of a basket of goods and services in a specific place during a certain period of time.
Therefore, when the United States reports a positive annual variation of the CPI of 4.2%, it ultimately means that the prices of the goods and services that make up the basket have increased by 4.2%.
And, as we know, the CPI is an indicator to measure the inflation of a country. And adding to the fears they 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 declines on Wednesday and ended the trading day down 2.14%, 1.99% and 2.67% respectively.
And while Bitcoin has stood out as an excellent haven of value, the leading crypto fell 7.77% over the past 24 hours following the US inflation news. In fact, the general crypto market has been stained red. The major cryptocurrencies Ethereum, BNB, Dogecoin, and Cardano all faced drops of 1.85%, 6.06%, 10.5%, and 5%, respectively.
We want to know your opinion! Is Bitcoin the safe haven against inflation?
Crypto regulatory pressures by the SEC are costly
According to a report by Cornerstone Research found that the United States Securities and Exchange Commission (SEC) earned $ 1.77 billion in crypto penalties.
According to the investigation, the SEC was one of the main regulators in enforcing crypto regulations. Consequently, their activity resulted in $ 1.77 billion in fines to crypto firms.
Specifically, it initiated 75 enforcement actions against crypto companies and individuals. This 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 sense, he believes that his replacement is between any crypto project that may arise and Bitcoin.
Therefore, he explained that “It will 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 be wary of the Bitcoin futures market.
- Crypto analyst Scott Melker demonstrates his concern about the speculative surge in the price of Dogecoin and Shiba Inu.