Bitcoin Hits $69,000 After Hot US Inflation Report
11 Nov 2021 · 3rd Party Analysis
- Bitcoin gains a quick 5% to reach a new all-time high of $69,000 minutes after US inflation report
- Consumer price data in the US showed an annual 6.2% rise in inflation, highest since 1990
Bitcoin Hits a Fresh Record High of $69,000
Bitcoin, the leading cryptocurrency in the market, rose to a new all-time high Wednesday. The token peaked at $69,000 per coin, the highest level ever. This said, bitcoin added a quick $3,000, or 5%, to its price in less than an hour.
Largely responsible for the gains was the latest inflation report in the US. In more detail, the consumer price index (CPI) for October, showed an annual increase of prices by 6.2%. In other words, this was the fastest pace of price growth in more than three decades, going back to 1990.
In turn, the hot inflation report helped investors increase their bets on bitcoin, fueling its price to fresh record highs. More importantly, the jump in price highlighted the market participants’ view on bitcoin as a hedge against inflation.
Bitcoin as a Hedge Against Inflation
To expand further, the inflation-hedge narrative has been subscribed to bitcoin due to its fixed supply of 21 million tokens. This means that there will never be more than 21 million bitcoins, of which nearly 19 million are now in circulation.
In contrast, the US dollar has limitless supply as it could always be printed by the US Federal Reserve. Doing this, however, not only increases the number of dollars in circulation but also reduces their purchasing power. And that’s how inflation is created.
Against this backdrop, the market demonstrated yesterday that traders recognized the safe-haven characteristics of bitcoin in a high-inflation environment.
Dive Deeper in the World of Trading
In the broader market, stocks and pairs kicked off Thursday’s session on a high note. More specifically, the US dollar maintained its advantage over other currencies in the forex market. The EUR/USD, for example, remained pressured below 1.15, a level last seen in July 2020.
Gold, on the other hand, is up for a sixth straight day today. The precious metal soared to $1,869 on Wednesday as traders reacted to the inflation data.
Meanwhile, in stocks, Wall Street’s main indexes closed in the red on Wednesday. The trading session yesterday was under heavy pressure from the inflation figures which came out one hour before the bell. To this end, the Dow Jones Industrial Average lost 0.6%. In addition, the S&P500 dropped 0.8%. And the tech-heavy Nasdaq Composite erased 1.6%.
Elon Musk Sells $5 Billion Worth of Tesla Stock
Tesla stock attempted to recover some of its steep losses from the past several days. As a result, shares of the electric-car company gained 4.3% yesterday. Still, looking ahead into the day, the stock could get highly volatile.
The reason for it will be the news that Elon Musk, Tesla CEO, sold roughly $5 billion worth of stock over the past three days. With this in mind, the number of shares sold is only 25% of what Mr. Musk should offload if he is to keep his promise.
Over the weekend, Elon Musk released a Twitter poll asking if he should sell 10% of his Tesla shares. As it turned out, Twitter users voted in favor of Mr. Musk’s proposal. Now, the billionaire chief executive should sell as much as $20 billion worth of Tesla stock.