Bitcoin and other Altcoin prices decreased on Wednesday after the US released the hot-to-intake consumer inflation data.
Bitcoin (BTC) declined by 3%, while other popular Altcoin saw a decline in the stator. LiteCoin (LTC) was one of the worst performing coins, which was more than 11% in the last 24 hours.
Shiba Inu (Shib) and Solana (Sol) fell more than 5%, while all cryptocurrency’s total market cap declined by 3%, from 3% to $ 3.11 trillion.
US inflation increased in January
The main catalyst for the cell-off was a report showing that American inflation increased in January, a trend that may continue this month. The headline consumer price index increased from 0.4% in December to 0.5% in January, more than an average estimate of 0.5%. This increase has been translated at the highest level in several months, an annual increase of 3.0%.
Core consumer inflation rose from 0.2% to 0.4% on a monthly basis and 3.2% to 3.3% annually.
These numbers pushed US stock futures less, with Dow Jones and Nasdaq 100’s index falling more than 400 points. American bond yields increased, 10 years and 30-year yields increased by 4.63% and 4.82% respectively.
The market reaction was mainly inspired by the expectations of prolonged high interest rates. In a statement on Tuesday, Federal Reserve President Jerome Powell reiterated that the Fed was not hasty to cut rates, citing high inflation. Fed official Bath Hamac echoed a uniform stance, stating that future rate decisions should depend on inflation depending on inflation. He Said,
“As long as the labor market remains healthy, I am looking for wide-based evidence that the inflation is continuously returning to 2% before adjusting the policy.”
Impact of inflation on bitcoin, shiba inu, solana and other ultcoin
High inflation affects bitcoins and other ultachcins such as Solana and Shiba Inu due to interest rates and its impact on bond markets.
The Fed has a double inflation and a double mandate to maintain a stable labor market. It usually cuts rates when inflation falls to encourage consumption. However, as the CPI moves beyond 2% target, the possibility of additional rate cuts is reduced. In its final meeting, the Central Bank estimated a two -rate cut this year.
Red-hot CPI print means that Fed cannot cut rates this year. Mohammad L-Ariaan has indicated that rates may increase since Fed Trump’s tariff Will spoil the situation.
When the Fed was seen in 2022, bitcoin and ultcoin declines.
