Leading cryptocurrencies in Bitcoin and Ethereum continued to dip following the release of the U.S. Bureau of Labor Statistics consumer price index (CPI).
The index is often used as a barometer for measuring inflation throughout the American economy. It tracks the rate of change for prices in things like gasoline, used cars, apparel, and other items.
The biggest cryptocurrency by market capitalization was trading for $18,350 at the time of writing, a 24-hour drop of 3.7%. The asset had already experienced a brief sell-off and was trading below $19,000 for the first time since September 22.
Bitcoin is currently 73% lower than its all-time high of over $69,044 it touched last November.
Ethereum hasn’t fared much better.
The second largest cryptocurrency is currently trading at just about $1,200 after having dropped 6% over the past 24 hours. In the past hour, ETH dropped 2%.
CPI report, inflation and the economy
The CPI report showed that prices across the range of goods the index tracks has increased 8.2% from a year earlier.
This data likely means that the Federal Reserve is likely to continue to hike interest rates in an attempt to cool the economy and curb rising inflation—which currently stands at a 40-year high in the U.S.
Stocks also took a hammering. The Dow Jones Industrial Average was down 0.1%, or 28.34 points, at 29,210.85. While the S&P 500 was down 11.81 points—0.33%—to 3,577.03.
Stock futures also slid rapidly following the release of the data.
When U.S. equities take a hit, Bitcoin and the rest of the crypto market tend to follow as investors tend to look to safe havens like the U.S. dollar and avoid “risky” assets.
Today’s data shows that more pain is likely to come as the U.S. central bank will continue to up interest rates to get inflation under control.
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.