Bitcoin has erased recent gains, plunging below the $22,000 level once again
The price of Bitcoin, the world’s largest cryptocurrency, has plunged sharply on a worse-than-expected inflation report, losing 4.7% of its value in mere minutes. The crypto king has reached an intraday low of $21,764 on the Bitstamp exchange.
The core consumer price index (CPI) rose 0.6% on a month-over-month basis, which is roughly double the forecast. While there has been a sharp decline in gas prices of roughly 10%, it has been offset by growing shelter, medical care, and food prices.
The latest inflation data has thrown a wrench in the works for those who expected Bitcoin to finally start recovering in September after bulls managed to defend the $20,000 level.
The cryptocurrency’s price action is still driven by broader macroeconomic factors, which is why it plunged swiftly together with U.S. stock futures.
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The new CPI data will likely prompt policymakers at the U.S. Federal Reserve to adopt an even more aggressive monetary policy.
The market is now pricing in a 19% chance of a mammoth 100-basis point hike in September, but the consensus appears to be that the Fed will settle for another 75-basis point increase.
