Inflation data from the United States has caused panic in many market segments. Reports of inflation data are prompting a variety of reactions and expectations. Inflations are now affecting cryptospace, according to reports.
The US Bureau of Labor Statistics has released reports that show different markets have many viewpoints. However, according to the released data, there’s been an increase of 9.1% in the consumer price index since June last year. This is more than what some analysts predicted.
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Changpeng Zhao, Binance CEO (CZ), seems to disagree with the published inflation data. According to CZ BinanceInflation of 9.1% is magically low in comparison to other events.
Changpeng Zhao claimed that USD’s supply rose by 80%. That is, it was 5 times more than its initial supply. Therefore, it is possible to expect that the inflation rate will be approximately 500%. In CZ’s terms, such calculation should depend entirely on the rise in money supply over a given period.
Twitterati swiftly offered a corrective response to Changpeng Zhao’s indications for inflation data. To clarify, inflation calculations should take into consideration different demand and supply variables. Inflation calculations should take into account the amount of money available for a period.
Many Markets Fall With Inflation Data
Bitcoin’s value plunged below $19,000 within minutes of receiving inflation data. BTC’s downward slide was not isolated. Other conventional stocks such as S&P 500, Nasdaq, and Dow Jones plummeted with the resulting high inflation data.
With inflation increasing year-on-year, much has been said about the crypto market. This causes massive instability in market values through 2022’s first half. Several firms were threatened with insolvency as the market plummeted by 70% from the start of the year.
Before it announced the inflation data, predictions from market consensus expected 8.8% for June’s CPI. It was 0.3% below the US Bureau of Labor Statistics’ report.
The high inflation rate has also prompted more prominent figures in crypto. Tyler, Cameron Winklevoss and Michael Saylor are just a few of the prominent crypto space figures. They believe that the value of Bitcoin has helped to improve the situation and increased adoption.
Inflation rate alerts indicate a sharp increase in Federal Reserve interest rates. For the cryptocurrency ecosystem, this is a major negative.
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The rise in interest rates has had a negative impact on Bitcoin’s performance. The crypto market also suffered from its poor performance.
Featured image taken from Flickr. Chart taken from Tradingview.com