The biggest cryptocurrencies in the world dipped sharply Thursday after the latest inflation data showed wholesale prices are rising much faster than expected. The price of Bitcoin is down 3.8% on the day ($117,900), Ethereum is down 4% ($4,535), and Ripple is down 6.1% ($3.07) according to CoinMarketCap.
Crypto prices are responding to the Producer Price Index (PPI) for July, which measures the average change in prices from U.S. manufacturers and service providers. It rose by 0.9%, according to the Bureau of Labor Statistics, the largest monthly increase since March 2022, according to the Wall Street Journal.
Why is it that bitcoin and other cryptocurrencies have declined in response to the inflation rate rising? Should the response be the other way around? Bitcoin is anti inflationary so it makes more sense to use bitcoin to protect the value of your bitcoin. So, why was the response like this? What do you think so?
Because cryptomarket is now a part of the traditional financial market and what is happening with the world economy is directly reflected in cryptomarket. You should not think that cryptomarket is something separate and independent. No, it is not, because big money of institutions (traditional market) was poured into this market.Crypto prices are responding to the Producer Price Index (PPI) for July, which measures the average change in prices from U.S. manufacturers and service providers. It rose by 0.9%, according to the Bureau of Labor Statistics, the largest monthly increase since March 2022, according to the Wall Street Journal.
Why is it that bitcoin and other cryptocurrencies have declined in response to the inflation rate rising? Should the response be the other way around? Bitcoin is anti inflationary so it makes more sense to use bitcoin to protect the value of your bitcoin. So, why was the response like this? What do you think so?
Only the limit of 21 mln.BTC makes bitcoin an anti-inflationary asset. How can an asset be anti-inflationary if its price is extremely volatile (it falls and then rises)? Bitcoin could be called anti-inflationary if its price was constantly growing, as in a bullish trend. But as you all know, in a bearish trend, the price of bitcoin falls. Does it mean that during these periods bitcoin is inflationary?
In the long term, bitcoin turns out to be anti-inflationary, to be honest.