Bitcoin Price Rises as US Stocks Wobble Amid Higher Inflation

14 Oct 2021 · 3rd Party Analysis

Vector of Bitcoin logo Over USD Symbol, representing BTC/USD Trading Pair over a Candlechart background. Bitcoin Price Rises as US Stocks Wobble Amid Higher Inflation


In Summary

  • The price of bitcoin rises above $57,000 as traders increase buying momentum
  • US stocks, in contrast, wobble across sectors as inflation jumps in September

Bitcoin Price Rises and Outperforms Stocks. New Monthly High

The price of bitcoin rose to a new monthly high this Thursday morning. After several days of consolidation around $55,000 to $57,000, the orange coin surged above $58,000. More precisely, bitcoin reached a session high of $58,500, a level last seen in early May.

In contrast, stocks in the US were rattled as investors had to digest a hotter-than-expected inflation report in the US. The S&P500, a broad-based major stock index, was pressured during most of the session yesterday. Near the end, however, market participants increased their buying appetite and lifted the benchmark mildly into positive territory.

Still, cryptocurrencies have vastly outperformed stocks this month. While the S&P500 is virtually flat for October, bitcoin’s price is higher by more than 30%. What’s more interesting, earlier today, the original coin floated just about 10% away from its all-time high of $64,800. The record, set in mid-April, is now coming closer to being eclipsed as the crypto outlook has improved significantly.

US Becomes Top Mining Destination after China Bans Crypto

Adding to the flurry of positive updates around the crypto space, America is now officially the leading Bitcoin mining hub. That became clear in a fresh report, released by Cambridge University. Statistics show that for August, the US held as much as 35% of the global hash rate.

In more detail, hash rate means the required computational power to mine Bitcoin. That said, the US is now the top destination for miners after Beijing introduced a sweeping ban over crypto-related activities. The complete crackdown from Chinese authorities happened near the end of May.

Back then, China held about 44% of the global mining hash rate. In just two months, however, the country has lost all its miners and now has a 0% hash rate share. In contrast, the US held less than 18% in May this year.

Dive Deeper in the Financial World

In other news, the financial market today has been showing signs of optimism despite challenges. Stock futures early on Thursday floated higher by about 0.5% to 0.9%. Across the Atlantic, major European markets are trading in the green.

The price of gold jumped to a one-month high near $1,800 per troy ounce. The precious metals market was the preferred safe haven on Wednesday after the US reported inflation for September arrived at a 5.4% annual rate.

The higher inflation prints stoked fears that consumer prices might not be coming down any time soon. On that front, the Federal Reserve signaled in its meeting minutes there are mounting concerns regarding the pace of inflation. The US central bank also announced Wednesday it will begin reducing its pandemic-era stimulus by $15bn a month, starting November.

Economic News Today (EST time)

Traders and investors today will be watching the latest jobless claims report. The data is scheduled to arrive at 8:30. At the same time, the PPI index will be released. Higher volatility could be expected in the US dollar and the broader currency market. Next, at 11:00, crude oil inventories will be published.

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