Bitcoin recovered past US$20,000 on Thursday morning in Asia following a steep 3.4% drop within an hour following the U.S. announcing its fastest inflation growth in 41 years.
See related article: Bitcoin price crosses US$22K; Fed cools recession fears
- Inflation levels in the U.S. soared 9.1% in June compared to a year ago according to the latest Consumer Price Index report released on Wednesday, showing the U.S. Federal Reserve’s aggressive interest rate increases have done little to curb rising prices so far.
- This represents a 1.3% increase from the previous month — the most since 2005 — as the ongoing war in Ukraine and supply chain backlogs in China contribute to rising goods prices.
- The Fed was expected to raise rates a further 75 basis points this month, but the Fed may consider an even more aggressive approach due to rampant inflation.
- All cryptos in the CoinMarketCap top 10 were in the green this morning in Asia, rebounding from a sharp fall after the announcement.
- The Dow Jones Industrial Average and S&P 500 Index both closed down by less than 1%, while the NASDAQ Composite Index finished trading down only 0.15%
- While once seen as a hedge against inflation, Bitcoin has begun trading similarly to a risk asset, losing 55% of its value this year.
See related article: Is Bitcoin really a hedge against inflation?