November year-on-year inflation in the US rose to 2.7%, the US Bureau of Labor Statistics just reported. This metric had been 2.6% in October. For its part, core inflation—which excludes food and energy—has remained at 3.3% year-on-year.
He increase of inflation is in line with market expectations, which already anticipated an inflationary increase up to that figure.
As an immediate reaction to the data, the price of Bitcoin/” target=”_blank” rel=”noreferrer noopener”>bitcoin (BTC) reacted with a slight rise which took it back to the level of USD 99,000after having been close to USD 94,000 this week.
The following graph, published in the X account of CriptoNoticias, shows the behavior of the price of bitcoin:
The relationship between inflation and the price of bitcoin is based on several factors. Inflation generally erodes the value of fiat currencies, leading investors to seek assets that can serve as a hedge against loss of purchasing power.
Bitcoin, with its limited and decentralized supply, It is perceived as an alternative to traditional assets that can depreciate with inflation.
When inflation increases, investors tend to move their capital towards assets such as gold, and in recent years, also towards digital currencies such as bitcoin. This behavior is explained because bitcoin is not controlled by any central entity that can print more units, which gives it anti-inflationary characteristics.
What happened to the price of bitcoin suggests that investors are reacting to clear signals of an economy that continues to navigate inflationary waters, although moderate.
The Cryptocurrency market is keeping an eye on these figures because they represent a key indicator of economic health and monetary policy. While the rise in the price of bitcoin was not dramatic, It does reflect the market’s sensitivity to macroeconomic data.
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