The inflation rate in the United States has been one of the macroeconomic indicators that have had the most significant effect on digital currencies, radically impacting the price and acquisition of risk assets in an environment that does not seem encouraging from an economic and financial global perspective.
The pressures at the macroeconomic level have kept crypto investors on alert, who are attentive to the monthly report on inflation in the US since the increase or decrease in demand for crypto assets will depend on its result.
Financial analysts usually indicate that the expected inflation rate is between 8 and 8.1%, representing a slight decrease but encouraging for the digital asset market after being struck by galloping inflation that reached the maximum value that did not occur 40 years ago.
US inflation figures affect bitcoin.
October 13 was perhaps the most anticipated day for all those linked to finance and investment, the Fed ruled on the monthly report on inflation in the US, and the results were not as expected since they yielded a rate equivalent to 8.2%, more than expected.
The market for traditional and digital financial assets was affected in a pretty unexpected way where stocks, cryptocurrencies, and bonds closed higher, a completely different behavior since asset sales without market distinction would be generalized if the report were not favorable.
The figures that show that the US economy is not at its best have somewhat favored the cryptocurrency market.
The Consumer Price Index increased, which would represent a limitation for investors and users of the crypto market to have a surplus of capital to invest; it turned out to be the opposite.
The immediate reactions of the market went against all odds to the point that, as expected, interest rates continued to increase. As a result, the demand for financial assets and cryptocurrencies closed higher by more than 4.6% and 7.8%, respectively.
The effects on the price of Bitcoin were expected to be contrary to the behavior of the financial market on the day, which undoubtedly gave a breath of hope for all investors to see that, in one way or another, inflation could stop impacting the price of cryptocurrencies.
Irrationality in its entire splendor in the crypto market
The eventualities rose in the market after the Fed report and the new economic measures made journalists, financial analysts, and investors leave rationality aside after evidencing the behavior of assets in the global economic and financial environment.
It is necessary to carefully evaluate all the actions that took place among financial assets because it seems that the change in trend in the cryptocurrency market could be generated and wait for a possible rally that anticipates forecasts.
Everything seemed to be a game between those who could predict with greater certainty what would happen to asset prices, where no one explains the rise in prices despite being faced with measures that are not at all beneficial.
The main actors from now on will be the investors, on whom the exit from the crypto winter will depend, thus generating an initial bullish phase where the price of Bitcoin, for example, would begin to attract attention, which would undoubtedly attract more investors, raising the cost of the same.
The Fed will continue to intervene in the price of cryptocurrencies
While the monthly report goes some way to demonstrating the strength of the US economy, there is a possibility that the Federal Reserve will be much more aggressive in its rate hike decisions, leading to a crash in asset prices financial in general.
There is no clear reasoning that can explain what happened on Thursday before the Fed’s pronouncement; everything depends on the analysis and result of the other macroeconomic indicators to have an overview of what could happen with the price of cryptocurrencies in the US economy.
The price of Bitcoin and cryptocurrency investors today are attentive to what is happening in the global economic and financial landscape without limiting their vision to what can happen only with digital currencies.
Conclusion
The measures to control inflation by the Federal Reserve of the United States through the increase in interest rates do not seem to be enough since the prices of goods and services continue to increase, which could end up in permanent damage to the economy.
