Following the release of the U.S. Bureau of Labor Statistics' consumer price index (CPI), Bitcoin has once again followed the stock market.
Bitcoin and Ethereum continued to dip after the consumer price index (CPI) was released. For the information of everyone, the index is often used as a barometer for measuring inflation throughout the American economy and it tracks the rate of change for prices in things like gasoline, used cars, apparel, etc.
Bitcoin, the biggest cryptocurrency by market cap was trading for $18,350 at the time of writing, a 24-hour drop of 3.7%. It had already experienced a hasty discharge last September 22, and is now trading again below $19,000. Currently, Bitcoin is 73% lower than its all-time high of over $69,044 it touched last November 2021.
Ethereum hasn't fared much better either as it is currently trading at just about $1,200 after having dropped 5.7% over the past 24 hours.
CPI Report, Inflation and the Economy
As shown by the CPI report, prices across the range of goods the index tracks has increased 8.2% from a year earlier.
See our interactive graphics on today’s new Consumer Price Index data https://t.co/h249qU8EyC #CPI #BLSdata #DataViz
— BLS-Labor Statistics (@BLS_gov) October 13, 2022
This data 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.
A hammering was also dealt to the Stock market. The Dow Jones Industrial Average was down 0.1%, or 28.34 points, at 29,210.85. Meanwhile, the S&P 500 was down 0.33%, or 11.81 points 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 CPI 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.
