Storm in the markets – An economic indicator report compiled by the US Bureau of Labor Statistics was released last Friday. The results announced concerning the economic inflation of the first world power are historically high. Supported by the Fed, the American federal bank, this report had repercussions on bitcoin prices. Since then, an even more uncertain atmosphere hangs over the markets.
In May inflation does what it pleases
The U.S. Bureau of Labor Statistics report lists the various consumer price indexes (CPI). It is a landmark followed for theinflation. There are several types of calculationsCPI : one includes prices excluding power supply and energy cost (Basic CPI) and the other with (Overall CPI). In the details, there is also a CPI by consumption sector : food, petrol, energy, transport, etc.
Inflation therefore corresponds to a rapid and excessive increase in consumption indicators. It then affects prices, which soar. In France, consumer price indices are calculated by INSEE.
If we return to our sheep, the recent report therefore explains that a new peak has been reached. A level not seen for forty years. This record is problematic and symptomatic of a delicate economic period.
Indeed, theOverall CPI of the country increased by 8.6% after recording a loss of 8.3% in April. L’Basic CPI meanwhile increased by 6% between May 2021 and May 2022. However, this increase is less marked than in April 2022 (6.2%).
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Inflation we understand, and Bitcoin in all this?
For large American investors, this kind of report published a few days before an important Fed meeting sets the pace for a future third rate hike. It’s a kind of bad omen.
The Bitcoin curve was immediately affected at the end of last week. Bitcoin is facing the wrath of regulation exacerbated by this rise in inflation. The Terra disaster, the fall of its stablecoin the UST and its entire ecosystem did not help the business of the king of cryptocurrencies. After the publication of the report, BTC price plunged back under the $30,000. The dollar in this period psychologically becoming a safe bet.
However, some seasoned speeches seem to say that the worst is behind us, as declared by Jonathan Silver, founder and CEO of Affinity Solutions, a global audit and survey company on consumer purchasing habits:
“The labor market remains strong, which puts money in people’s pockets. However, the increase in prices remains higher than that of wages. Hopefully, this trend will reverse when inflation peaks and begins to dissipate. Our shopping spend data suggests this is the direction we are headed. »
Hints of a happy ending are also present in the action of Federal Reserve Bank of Atlanta President Raphael Bostic. He would consider pausing rate hikes in September if rising inflation subsides by then.
It seems that in the United States, the reaction to inflation is to sell its bitcoins, and to take refuge in the dollar. However, depending on your perspective, Bitcoin appears as a hedge against dollar price inflation. In South America: El Salvador orArgentina and Brazil may be an emerging example.
If some sell their bitcoins, others will take advantage of this opportunity to fill their wallets. Are you going to wait for the king of cryptos to rise again to new heights? Act now and register on FTXthe reference platform (affiliate link).