After the U.S. inflation statistics were released on July 12, Bitcoin (BTC)’s price settled into a steady holding pattern, which eventually caused further volatility in the market.
Bitcoin and other cryptocurrencies have been suffering from a negative trend due to the latest CPI data for June, which revealed that inflation in the United States had reached 9.1 percent, the highest level since November 1981.
What Is the Current Value of Bitcoin?
The market capitalization of Bitcoin currently stands at $366 billion, down 3.45% on the day and 4.70% for the week, according to CoinMarketCap.
In only 10 minutes after learning of the June CPI report’s disappointing results, the flagship digital asset lost $15 billion of its market capitalization.
Inflation statistics were due to be released shortly, so investors breathed a sigh of relief. However, despite the calm global markets, the price of digital assets was likely to be impacted negatively or positively by any announcement, according to many prominent crypto trading analysts at the beginning of the week.
Despite the much higher inflation statistics than expected, the U.S. Federal Reserve will have more pressure to raise interest rates.
What Is the Reason for Bitcoin’s Decline?
Due to its inability to act as an inflation hedge, Bitcoin has suffered a significant loss in value this year. In addition, in a low-interest rate environment, Bitcoin has suffered along with other risk assets due to the Fed’s monetary policies.
Substantial job numbers were reported last week to indicate that the Federal Reserve could significantly avoid a recession while raising interest rates. Even though interest rates have been rising sharply, this was the case.
After hitting a low of $17,600 in June, investors generally believed Bitcoin would experience another sell-off soon.