The current US inflation data has thrown a huge tantrum and panic in many market sectors. Various expectations and reactions emerged after the inflation data reports. It appears to be a fact that even the crypto space is now receiving effects from inflation and other macroeconomic factors.
with Reports From the US Bureau of Labor Statistics, different markets are filled with diverse opinions. However, according to the released data, there has been a 9.1% increase in the CPI since June of last year. This value is more than the expectations of some analysts.
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However, Binance CEO Changpeng Zhao (CZ) appears to have the opposite idea regarding the inflation data released. according to CZ BinanceInflation 9.1% is a magically low value in relation to some of the surrounding events.
Changpeng Zhao stated that the supply of US dollars has increased by 80%, 5 times the original supply, through more coinage. Thus, the value of inflation is expected to be around 500%. According to the terms of CZ, this calculation must be based entirely on the increase in the money supply during a given period.
Twitterati quickly provided a corrective response to Changpeng Zhao’s indicators of inflation data. In further explanation, inflation calculations must take into account various factors of supply and demand. Also, he should take into account the survival of the money supply during a certain period.
Many markets are flooded with high inflation data
With the release of inflation data, Bitcoin saw a drop in value as it fell below $19,000 in just a few minutes. Unfortunately, BTC is not alone in its bearish move. Other traditional stocks such as the S&P 500, Nasdaq and Dow Jones fell with the resulting higher inflation data.
The broader cryptocurrency market has been largely neglected with inflation continuing to rise with the year. The effects create massive instability in the market value during the first half of 2022. Subsequently, the market is down more than 70% since the beginning of the year, with many threats of bankruptcy for many companies.
Before the inflation data was released, the market consensus forecast had forecast 8.8% for the June CPI. The expected value was 0.3% lower than the US Bureau of Labor Statistics report.
Major figures in the cryptocurrency space have also been reacting to the high rate of inflation. These include Michael Saylor, Tyler and Cameron Winklevoss. In their opinion, the high value led to the development of the current status of BTC and even the adoption of the cryptocurrency on a larger scale.
With a red alert with an inflation sign, it indicates a sharp rise in interest rates by the Federal Reserve. Such a trend represents a huge minus for the entire cryptocurrency ecosystem.
Bitcoin has been doing very poorly with increased lending rates. Its poor performance led to a drop in the cryptocurrency market as well.
Featured image from Flickr, chart from Tradingview.com