Bitcoin’s value rebounded on Thursday after falling to a low not seen since July 2 after the announcement of much higher-than-expected September inflation.
Bitcoin was trading at $19,407 on Thursday afternoon, up 1.35% over the past 24 hours. Bitcoin plummeted to $18,195 shortly after inflation was announced, according to cryptocurrency indexer CF Benchmarks.
The government’s US Consumer Price Index (CPI) showed 8.2% year-on-year inflation last September, beating Wall Street’s consensus forecast of 8.1%. Excluding food and energy, core inflation rose 6.6% year-on-year, the highest since 1982.
The data shows that inflation is proving harder to contain, despite the Federal Reserve’s multiple rate hikes that have pushed stocks and cryptocurrencies significantly lower this year.
“Worse-than-expected inflation is never a good thing for traders,” said Michael Safai, a partner at crypto trading firm Dexterity Capital. However, the “less than optimistic outlook” has increased trading volumes and some directional traders have found bargains, he added.
When inflation beat consensus expectations this year, bitcoin sold an average of 4% in the first 30 minutes of an economic announcement, according to Singapore-based crypto fund QCP Capital.
Today’s move was in line with the 30-minute average, but it still puzzles many market observers. Bitcoin held its $18,000 lower bound while it continued to trade in a lower range against equities.
The Nasdaq (^IXIC) closed 2.23% higher after falling 3.2% on Thursday. The S&P 500 (^GSPC) ended up 2.6% after his 2.4% drop.
The Nasdaq and S&P 500 each fell 13% last month. After he fell 56% in the second quarter, Bitcoin performed slightly better, falling 4% over the same period.
Ether (ETH-USD), the second largest cryptocurrency, fell slightly, down 0.26% on the day, trading at $1,294 per coin, while Coinbase Global (ETH-USD)coin) closed down nearly 1% on Thursday.
With cryptocurrencies losing more than half of their value between April and July of this year, the situation cannot be expected to improve, said Mike, founder and CEO of leading cryptocurrency investment manager Galaxy Digital. Novogratz told Yahoo Finance earlier this week. .
“There is tremendous fear in the market right now,” Novogratz said.
As of Thursday afternoon, crypto-asset market capitalization as measured by Coinmarketcap bounced from $923 billion to $881 billion and back to $925 billion in the same 24-hour period.
“Revenues are declining in this industry, [trading] Less volume, less excitement,” Novogratz said. [crypto] Winter may last longer or shorter than people think. Hard to predict. “
Ben McMillan, founder and chief investment officer of hedge fund IDX, told Yahoo Finance, “This is going to look like daily volatility is up until the market reaches some consensus. , the path remains the same,” he said.
McMillan said talk of the Fed reversing monetary policy sooner than expected could become a reality given that liquidity could “dry up” in U.S. Treasury markets. added that there is
Although that possibility may be low, he admitted that he was “very curious about what tomorrow will bring.”
David Hollerith is a senior reporter at Yahoo Finance covering cryptocurrencies and stock markets. Follow him on Twitter. @DsHollers
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