Rising inflation concerns weigh on Bitcoin’s breakout as traders refuse to take on bullish positions, despite Monday’s 4% price bounce.
Inflation News
Inflation as it relates to money means the devaluation of a payment vehicle amid the rising cost of goods and services. The term usually refers to fiat currencies, which can lose value when a government expands the supply of dollars in an economy. Venezuela saw its currency lose significant value in 2018 during hyperinflation — an exaggerated form of inflation. When it comes to cryptocurrencies, however, inflation works differently. Many assets, such as Bitcoin, have a maximum supply programmed into their code, which can prevent a loss of value due to added supply. Bitcoin does entail some level of inflation, as more coins are released into its circulating supply through a set and predictable mining schedule, but maximum supply sets definite limits on BTC inflation.
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Gold is also being impacted by rising anticipation that the US Federal Reserve won’t cut interest rates this year, while Fed chair Jerome Powell said inflation would rise.
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Bitcoin searches for equilibrium at $70,000 while rising crude oil prices and tanking stock markets have investors worried over the future of inflation in the US.
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The disruption to the oil market and critical energy effects may have long-term economic effects that investors are not pricing in.
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Bitcoin dropped below $71,000, but the market remains tilted toward bulls as spot ETF inflows and BTC buying from Strategy boost investor sentiment.
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Bitcoin price action fell to week-to-date lows with Bitcoin caught between high US inflation and nerves over Fed policy hints at the day's FOMC meeting.
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Saifedean Ammous, the author of The Bitcoin Standard, released an alternate history last fall, in which a decentralized gold system uproots central banking.
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“What’s a better time to cut interest rates than now? A third-grade student would know that,” said US President Donald Trump.
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Bitcoin remains under pressure as war and poor jobs data offset ETF inflows, shifting the $78,000 price target from late March to the coming months.
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The cost of medical care, apparel, household furnishings, airline fares, and education all rose during the month of February, BLS data shows.
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Historical data shows that Bitcoin typically gains 20% within a month of major spikes in oil prices. Should traders prepare for a rally to $79,000?
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A new war, private credit market weakness and spiking commodities prices add tail risk to Bitcoin’s price. Is $65,000 BTC’s next stop?
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In an interview with Natalie Brunell on Coin Stories, Masie described Bitcoin as functional currency in parts of Africa amid rapid inflation and currency debasement.
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Strive’s Joe Burnett argues AI-driven deflation may force looser policy, pushing Bitcoin toward $11 million a coin by 2036 and a $230 trillion market cap.
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Bitcoin struggled to breach $70,000 this month, while inflation rates decreased in Japan and some countries reevaluated crypto tax codes.
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