The price of Bitcoin suddenly surged by over $2,000 earlier today, cracking a new all-time high (ATH) above $69,000.
The event coincides with the US consumer price-index (CPI), which measures inflation, jumping to a 31-year-high – 0.3% higher than government estimates. With the pace of inflation over the past year now at 6.2% it’s way beyond the Federal Reserve’s 2% annual target and the highest since November 1990.
The news further solidifies feelings amongst crypto enthusiasts and non-traditional investors that Bitcoin may prove a formidable hedge against inflation. It also correlates that the BTC/USD pair may not be gaining value due to capital inflow but rather appearing so as a result of the US dollar losing value.
The ever-growing inflation also casts doubt on the Federal Reserve’s insistence that inflation is transitory. Craig Erlam, senior market analyst at foreign exchange firm Oanda, said “I have never been on board with the suggestion that bitcoin is an inflation hedge but it’s clear today that the narrative is sticking.”
The new Bitcoin high follows the overall cryptocurrency market reaching a $3 trillion valuation this past Monday, November 8th. Traditional US stock markets, including the Dow Jones Industrial Average, S&P 500 and Nasdaq were all down on Wednesday following a record of higher closes not seen in 24 years.
Meanwhile, stock markets in London, Frankfurt, and Hong Kong all closed up.