{"id":10743,"date":"2022-05-13T00:03:23","date_gmt":"2022-05-13T00:03:23","guid":{"rendered":"https:\/\/nftandcrypto-news.com\/nft\/us-inflation-surpasses-expectations-bitcoin-and-ethereum-in-rollercoaster-mode\/"},"modified":"2022-05-13T00:03:25","modified_gmt":"2022-05-13T00:03:25","slug":"us-inflation-surpasses-expectations-bitcoin-and-ethereum-in-rollercoaster-mode","status":"publish","type":"post","link":"https:\/\/nftandcrypto-news.com\/nft\/us-inflation-surpasses-expectations-bitcoin-and-ethereum-in-rollercoaster-mode\/","title":{"rendered":"US Inflation Surpasses Expectations, Bitcoin and Ethereum in Rollercoaster Mode"},"content":{"rendered":"
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Source: Adobe\/Deacon docs<\/figcaption><\/figure>\n

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US inflation hit 8.3% in April, down from a peak of 8.5% the month before, but still above expectations, new data from the US Bureau of Labor Statistics<\/strong> show. Right after the release, a sharp and short-lived correction across the crypto market started.<\/p>\n

\u201cOver the last 12 months, the all items index increased 8.3% before seasonal adjustment,\u201d the announcement said, adding that price increases for \u201cshelter, food, airline fares, and new vehicles were the largest contributors.\u201d<\/p>\n

The market\u2019s expectation was that inflation would come in at 8.1% in April, down from 8.5% in March.<\/p>\n

Meanwhile, the core-CPI (Consumer Price Index), which excludes prices on food and energy, came in at 6.2%, down from 6.5% a month earlier. The change on a monthly basis was 0.6%, a doubling from last month\u2019s rate and faster than the 0.4% change that was expected.<\/p>\n

Following the report, bitcoin (BTC) dived to almost USD 29,300, while ethereum (ETH) tested USD 2,165. However, both cryptoassets bounced back soon after, with BTC jumping above USD 31,500 (+0.7% in a day), while ETH moved to USD 2,365 (still -0.8% in a day).<\/p>\n

Despite initially trading lower, the S&P 500 stock index later turned around and moved up 0.88% for the day.<\/p>\n

Ahead of the release, BTC, ETH, and S&P 500 stock index futures all traded cautiously higher for day.<\/p>\n

\u201cPeaked, but much higher than expected,\u201d tweeted<\/a> the popular crypto trader and economist Alex Kr\u00fcger as the inflation numbers were released. He added that the inflation number was \u201cnot good\u201d and urged bullish traders to \u201ccareful.\u201d<\/p>\n

Commenting ahead of the release of today\u2019s inflation numbers, Daniel Morris, chief market strategist at BNP Paribas<\/strong>, told the Wall Street Journal that uncertainty among investors is now at an unusually high level.<\/p>\n

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\u201cIf we only had rising policy rates, or only had high inflation, or only had China or only had Ukraine, we could probably manage that. But we\u2019ve got all that simultaneously. That\u2019s why it\u2019s such a particularly challenging environment,\u201d Morris said.<\/p>\n<\/blockquote>\n

Notably, the White House did not issue any kind of warning, as they have done in the past, that the inflation number will be high. This was interpreted by some ahead of the release to mean that it will likely be lower than last month\u2019s report.<\/p>\n

Last month, White House spokesperson Jen Psaki said<\/a> the administration expects headline inflation for March to be \u201cextraordinarily elevated.\u201d<\/p>\n

As pointed<\/a> out by Quantum Economics<\/strong> founder Mati Greenspan, the market\u2019s view of inflation has changed quite a bit recently.<\/p>\n

While high inflation used to be considered good for bitcoin and the broader crypto space, this has now reversed to become a net negative, as it is believed that the US Federal Reserve<\/strong> will then move faster with its interest rate hikes.<\/p>\n

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Combined, the trajectory of inflation and wages are key factors in determining how much the Fed will raise interest rates at its next meeting.
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<\/strong>\u00a0
– Fed Hopes for \u2018Soft Landing\u2019 for US Economy, but History Suggests It Won\u2019t Prevent Recession
– As Inflation Is Here to Stay, Bitcoin, Ethereum, and Gold Investors Will Win, But Brace for Volatility – BitMEX<\/p>\n

– Fed Tightening \u2018More of an Opportunity Than a Threat\u2019 \u2013 Grayscale CEO
– As Bitcoin Keeps Tanking, Arthur Hayes Joins Chorus of USD 1M BTC Predictors and Warns of ‘The Doom Loop’
– Financial Stability Risks Grow as War in Europe Complicates Push to Contain Inflation<\/p>\n

– Why We Can\u2019t Just \u2018Stop Printing Money\u2019 to Get Inflation Down
– Get \u2018Mentally Ready\u2019 for Lower Bitcoin Prices as Rates Rise, Bitcoin 2022 Panelists Warn<\/p>\n

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(Updated at 13:48 UTC with details about changes in Core-CPI. Updated at 14:52 UTC with the latest market data.)<\/i><\/p>\n<\/p><\/div>\n