Bitcoin, Ethereum Erase Losses Following Hot Inflation Report
Bitcoin and Ethereum have recovered all losses from yesterday, following their plunging in response to the release of the U.S. Bureau of Labor Statistics consumer price index (CPI), which was up 8.2% from last year’s numbers.
The leading cryptocurrency is trading at around $19,649 by press time, or up as much as 3.4% since yesterday’s low of $18,347.67, per CoinGecko.
However, today’s upwards move still sees Bitcoin sit at close to year-lows, down 71.5% from its November 2021 high of $69,044.
Ethereum, the second-largest cryptocurrency by market capitalization, more than recouped yesterday’s losses to trade at $1,322, up 3.7% over the past 24 hours, at press time.
However, it is still well below its year-high of $4,878, per CoinGecko.
The Dow Jones Industrial Average and S&P 500 also recovered more than 2.5% since yesterday, largely erasing a week’s worth of decline. They are currently sitting at 30,038.72 and 3,669.91, respectively.
Bitcoin and Ethereum, as well as most other cryptocurrencies, tend to follow the equities market’s downwards movements, as investors rush to safe havens like the U.S. dollar to avoid "risky" assets.
Bitcoin, Ethereum react to fresh inflation numbers
Fresh numbers released in the CPI report yesterday showed that inflation on U.S. goods and services stood at 8.2% year-over-year.
The index tracks the rate of change in prices for things like gasoline, used cars, apparel, and other items, and helps track inflation across the economy.
The index rose 0.4 percent in September on a seasonally adjusted basis, after rising 0.1 percent in August, said the report.
Nearly all items increased in price, with only the gasoline index down 4.9% since August.
The high inflation rate means that the Federal Reserve is likely to continue raising interest rates as it attempts to tame inflation, which currently stands at a 40-year high in the U.S.Source