Bitcoin is not an inflation hedge . The first cryptocurrency is under pressure from much more inflation. As soon as the latest US inflation data was published, the prices of crypto assets, as well as important US stock indices, fell sharply. The so-called US consumer price index stood at 8.3% in November, again up 0.1 percentage point from October, according to the Bureau of Statistics.
In fact, many expected inflation to come down after the sharp rate hike Fed, but the fall proved that this theory is wrong. Most recently, at the end of August, the Federal Reserve, through its Chairman Jerome Powell, announced a tough, long-term fight against high inflation with higher interest rates — and thus also sent the cryptocurrency market into the red zone.
Now the same story is repeating itself — in 2022 we've seen it multiple times. The logic is that if inflation rose again in November compared to October, then the Fed will provide additional arguments in favor of a larger interest rate hike, and this, in turn, will reduce investment sentiment. On Wednesday, December 14, the Fed raised US interest rates by another 50 basis points.
The share prices of the largest US listed companies also fell on Wednesday, December 14, and quite sharply. The platforms of the Meta corporation, Facebook/Instagram (banned in the Russian Federation, recognized as an extremist organization) were particularly hard hit. Bitcoin is again trading below $18,000, while Ethereum has not been able to gain a foothold above $1,300.
