Key Highlights
- Bitcoin and other cryptocurrencies have been gaining increasing demand due to the high US inflation rate.
- The rise of Bitcoin has been attributed to the increasing demand from institutional investors.
Bitcoin and other cryptocurrencies have been gaining traction rapidly due to the high US inflation rate. The rise of Bitcoin has been credited to the growing demand from institutional investors.
Cryptobulls are driving the higher market with their optimistic outlook on the future of digital assets. As crypto adoption grows, it may soon become a mainstream alternative to traditional currencies.
What Is US Consumer Price Index (CPI)?
The US Consumer Price Index (CPI) is a key economic indicator of the price of crypto assets. It measures the average price change over time for a basket of goods and services. It is used to measure inflation in the United States and assess changes in purchasing power.
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How Do Changes In US CPI Impact The Price Of Crypto?
Changes in US CPI can have both positive and negative impacts on the price of crypto assets. For example, inflationary pressures can increase demand for crypto assets as investors seek a hedge against inflation. In contrast, deflationary forces from lower CPI can lead to decreased demand and volatility in crypto prices.
Inflation in the United States is expected to have decreased for the sixth consecutive month to 6.5% in December 2022 (from 7.1% in November), the lowest level since October 2021. After increasing for four months in a row and increasing by 0.1% in November, the CPI is expected to level out in the coming months.
Core inflation is forecast to drop to 5.7% annually, the lowest level in a year. Still, monthly core inflation is predicted to increase at a slightly quicker rate of 0.3% compared to 0.2% in November.
The US CPI figures can have a significant impact on the crypto market. Therefore, investors should keep an eye on these figures and understand how they can affect their crypto investments to make informed decisions about their portfolios.
