After reaching a record price of $68.950 just 24 hours ago, bitcoin is now down to $62.000. The significant 10% price decline occurred on Wednesday, at 9:00 PM coordinated universal time.
Bitcoin reaching almost $69k is a result of the surprisingly high inflation in October, a month prior. According to the report by the US Department of Labor, the US Consumer Price Index (CPI) for October was up by 6.2%. Consequently, making for the fastest CPI increase in 30 years.
Juan Pellicer from IntoTheBlock believes that bitcoin suffers due to the difficult month for the US stock exchange. According to the analyst:
Moreover, another financial analyst and writer, Lennard Neo, adds that both bitcoin and the US stock market experienced this delayed reaction as a direct consequence of inflation. Specifically, that the Federal Reserve could further tighten its monetary policy, in case of unexpectedly fast inflation.
As a result, many experts believe that should this trend continue, the United States central bank could try and ‘cut down’ the price of the risk assets.
Naturally, the bitcoin price drop significantly increased the demand for digital assets. According to Laurent Kssis, director of CEC Capital, while this is nothing new, the sudden price drop is still not clear. However, he suspects that it is due to liquidating long trading positions.
However, just as bitcoin goes down to $62.000, ehtereum also drops below its record price of $4.851. This amounts to a 2% decrease on Wednesday. However, not everything is grim for ethereum.
That is because ether notices a 35% increase for the past month. And many believe that ethereum will even outshine bitcoin in the long run.
One such individual is Daniel Kukan, a senior crypto trader at Crypto Finance AG. Moreover, he says:
It remains to keep a close eye on the situation. Especially since there are quite a few warnings about an upcoming hyper-inflation. And that will definitely drastically influence the price of all assets, including the digital ones.
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