Bitcoin declines due to news of the inflation rate

[kotajikikox]

The biggest cryptocurrencies in the world dipped sharply Thursday after the latest inflation data showed wholesale prices are rising much faster than expected. The price of Bitcoin is down 3.8% on the day ($117,900), Ethereum is down 4% ($4,535), and Ripple is down 6.1% ($3.07) according to CoinMarketCap.

Crypto prices are responding to the Producer Price Index (PPI) for July, which measures the average change in prices from U.S. manufacturers and service providers. It rose by 0.9%, according to the Bureau of Labor Statistics, the largest monthly increase since March 2022, according to the Wall Street Journal.


Why is it that bitcoin and other cryptocurrencies have declined in response to the inflation rate rising? Should the response be the other way around? Bitcoin is anti inflationary so it makes more sense to use bitcoin to protect the value of your bitcoin. So, why was the response like this? What do you think so?

[Alpha Marine]

You should edit your post and fix it. I think you ned to close your anchor tag properly so it doesn't link to every other thing you wrote from the website. Currently, all the write-up is part of the URL link.

I think people need to stop reading too much into every bitcoin price drop. It is a known fact that Bitcoin is a volatile currency/asset. It's normal for the price to fluctuate. Going from 120k to 115k in a week is not something we should read too much meaning into.

When it comes to bitcoin and other economic activities or factors, we have to know that it's not fixed. There are always assumptions. The fact that there is inflation doesn't necessarily mean bitcoin will increase. There may be other factors that could make the bitcoin price drop. If all other factors are constant while inflation is increasing, then the bitcoin price might increase.
You also have to remember that Bitcoin is not a national currency or asset. It's global, so an inflation in one country might not affect the price.

[pooya87]

I think people need to stop reading too much into every bitcoin price drop.

^ this.
Although I should add that it is about the size of the drop. 3% should be considered normal fluctuations in bitcoin market. If it were 30% then it would deserve discussing about the reasons.

Why is it that bitcoin and other cryptocurrencies have declined in response to the inflation rate rising?

Altcoins get dumped whenever bitcoin makes any move up or down. As for inflation, the inflation itself affects bitcoin price positively not the news about inflation.

When we zoom out we see a similar pattern repeat over the past months multiple times. Price slowly goes up to reach some resistance level and most of the times it can't break it so it comes down, sometimes it breaks it and sets a new ATH. But it is like a sideways market with an overall upward movement.

[m2017]

The biggest cryptocurrencies in the world dipped sharply Thursday after the latest inflation data showed wholesale prices are rising much faster than expected. The price of Bitcoin is down 3.8% on the day ($117,900), Ethereum is down 4% ($4,535), and Ripple is down 6.1% ($3.07) according to CoinMarketCap.

Crypto prices are responding to the Producer Price Index (PPI) for July, which measures the average change in prices from U.S. manufacturers and service providers. It rose by 0.9%, according to the Bureau of Labor Statistics, the largest monthly increase since March 2022, according to the Wall Street Journal.


Why is it that bitcoin and other cryptocurrencies have declined in response to the inflation rate rising? Should the response be the other way around? Bitcoin is anti inflationary so it makes more sense to use bitcoin to protect the value of your bitcoin. So, why was the response like this? What do you think so?

Because cryptomarket is now a part of the traditional financial market and what is happening with the world economy is directly reflected in cryptomarket. You should not think that cryptomarket is something separate and independent. No, it is not, because big money of institutions (traditional market) was poured into this market.

Only the limit of 21 mln.BTC makes bitcoin an anti-inflationary asset. How can an asset be anti-inflationary if its price is extremely volatile (it falls and then rises)? Bitcoin could be called anti-inflationary if its price was constantly growing, as in a bullish trend. But as you all know, in a bearish trend, the price of bitcoin falls. Does it mean that during these periods bitcoin is inflationary?

In the long term, bitcoin turns out to be anti-inflationary, to be honest.

[Versatile_choice]

I think people need to stop reading too much into every bitcoin price drop. It is a known fact that Bitcoin is a volatile currency/asset. It's normal for the price to fluctuate. Going from 120k to 115k in a week is not something we should read too much meaning into.

This is true, Moreover I see no reason why we should be getting ourselves worried over every dip that occurs. And yeah, bitcoin is very volatile this means that there will always be up and down in the market so this is not a new thing anymore. You can't be looking for a way to find the reason why the market is showing decline because you may even get negative result while trying to figure out the reason behind that.

Op is supposed to be lucky to see the market falling below the stated amount, because this is an opportunity to front load your bitcoin investment by applying some aggressiveness instead of trying to figure out the reason behind the market dip.

[Fiatless]

Why is it that bitcoin and other cryptocurrencies have declined in response to the inflation rate rising? Should the response be the other way around? Bitcoin is anti inflationary so it makes more sense to use bitcoin to protect the value of your bitcoin. So, why was the response like this? What do you think so?

Compared to other assets Bitcoin is a hedge against inflation. 3.8% decline in price is not a big deal considering that that the price has increased to about 87.97% within this year. Since most of the big crypto investors are in the US it is common that economic reports from the country affects the market.

Sadly, the US economy is being handled by people who are making inconsistent policies. Trump wants interest rate cut but his economic policies are making it difficult for the Feds to make it happen.

[henry_of_skalitz]

Why is it that bitcoin and other cryptocurrencies have declined in response to the inflation rate rising? Should the response be the other way around? Bitcoin is anti inflationary so it makes more sense to use bitcoin to protect the value of your bitcoin. So, why was the response like this? What do you think so?

Compared to other assets Bitcoin is a hedge against inflation. 3.8% decline in price is not a big deal considering that that the price has increased to about 87.97% within this year. Since most of the big crypto investors are in the US it is common that economic reports from the country affects the market.

Sadly, the US economy is being handled by people who are making inconsistent policies. Trump wants interest rate cut but his economic policies are making it difficult for the Feds to make it happen.

Some want to sit on two chairs, and sometimes, it happens, sometimes, it only seems that it's okay, but eventually, it crumbles 

[Dunamisx]

Since we admitted that its a volatile digital currency, then we should expect that the price should drop more often at the occasion of any breaking news, this is the usual thing that often happens and not the first of it kind, when the market fall like this, its will rise back, or in other way round, it may be a signal that we are going bearish gradually but faking it out in disguise, because soon after this fall, you will still experience a rise form the price, that is why we shouldn't sell each time we see a fall like this, we are expected to hod until the market pumps.

[purple_sparkles]

Since we admitted that its a volatile digital currency, then we should expect that the price should drop more often at the occasion of any breaking news, this is the usual thing that often happens and not the first of it kind, when the market fall like this, its will rise back, or in other way round, it may be a signal that we are going bearish gradually but faking it out in disguise, because soon after this fall, you will still experience a rise form the price, that is why we shouldn't sell each time we see a fall like this, we are expected to hod until the market pumps.

No matter what, bitcoin is still a good investment. Even if it happens that, out of carelessness or greed, you miss a good moment to sell, there’s no need to get upset, you just need to be patient and forget about it for a few years. Every cycle, bitcoin breaks through its previous ceiling, there has never been a time in a bull market when it didn’t surpass itself.

[john_egbert]

Since we admitted that its a volatile digital currency, then we should expect that the price should drop more often at the occasion of any breaking news, this is the usual thing that often happens and not the first of it kind, when the market fall like this, its will rise back, or in other way round, it may be a signal that we are going bearish gradually but faking it out in disguise, because soon after this fall, you will still experience a rise form the price, that is why we shouldn't sell each time we see a fall like this, we are expected to hod until the market pumps.

No matter what, bitcoin is still a good investment. Even if it happens that, out of carelessness or greed, you miss a good moment to sell, there’s no need to get upset, you just need to be patient and forget about it for a few years. Every cycle, bitcoin breaks through its previous ceiling, there has never been a time in a bull market when it didn’t surpass itself.

When you have BTC, worries should evaporate themselves, if you are able to hodl long enough, I totally agree with that

[bitzizzix]

What's happening now is normal and common, as cryptocurrencies and Bitcoin are volatile, and what has happened before will happen again. However, this is only temporary, as it will eventually reverse and rise again. This is a common occurrence and is nothing to worry about, as it occurs due to many factors.
It's also important to realize that Bitcoin often experiences dips or corrections after reaching new highs, which can be caused by profit-taking, recent concerns about US inflation news, comments from US officials discouraging the accumulation of Bitcoin for national reserves, and other factors. This is a multifactorial situation, and many factors are involved and cannot be predicted. However, this will all pass, and nothing will stop Bitcoin from continuing to rise. Any dip caused by any factor will be an opportunity for those looking to buy at a lower price or increase their purchases, as this is their best opportunity and has the potential to increase the price of Bitcoin again.

[uchegod-21]

Since we admitted that its a volatile digital currency, then we should expect that the price should drop more often at the occasion of any breaking news, this is the usual thing that often happens and not the first of it kind, when the market fall like this, its will rise back, or in other way round, it may be a signal that we are going bearish gradually but faking it out in disguise, because soon after this fall, you will still experience a rise form the price, that is why we shouldn't sell each time we see a fall like this, we are expected to hod until the market pumps.

It is funny how the only kind of volatility some bitcoiners understand is price increase alone. A price decline no matter how small is seen as a threat to what bitcoin stands for. Anything could have influenced this price decline and this particular one does not call for panic.  Well, some persons might panic and those are the class of investors who are only there for the hype. Some investors' expectations of bitcoin and part of the reasons bitcoin price decline due to panic.

[Hazink]

Since we admitted that its a volatile digital currency, then we should expect that the price should drop more often at the occasion of any breaking news, this is the usual thing that often happens and not the first of it kind, when the market fall like this, its will rise back, or in other way round, it may be a signal that we are going bearish gradually but faking it out in disguise, because soon after this fall, you will still experience a rise form the price, that is why we shouldn't sell each time we see a fall like this, we are expected to hod until the market pumps.

A volatile asset is not supposed to be stable, and we should know that the price will go up and down and should not put meaning into every little move it makes. Sometimes Bitcoin just does Bitcoin, not because we want to move into a bearish market or because it wants to move into a bull run. Not every market movement shows a signal, but we just want to be reading meaning into all Bitcoin moves, whether we put it on policies or whale accumulation or selling.

[MusaPk]

The Bitcoin price is never stable rather it keep moving up and down. I don't know why some calling this small dip as decrease in price or bearish season. It's normal for Bitcoin to take such dips on its way of moving up. If Bitcoin move up in price we will start hearing news that Bitcoin has started it's journey towards 150k. Bitcoin price is unpredictable thats why we need to be prepared for every price of Bitcoin both mentally and financially.

[edroi]

The biggest cryptocurrencies in the world dipped sharply Thursday after the latest inflation data showed wholesale prices are rising much faster than expected. The price of Bitcoin is down 3.8% on the day ($117,900), Ethereum is down 4% ($4,535), and Ripple is down 6.1% ($3.07) according to CoinMarketCap.

Crypto prices are responding to the Producer Price Index (PPI) for July, which measures the average change in prices from U.S. manufacturers and service providers. It rose by 0.9%, according to the Bureau of Labor Statistics, the largest monthly increase since March 2022, according to the Wall Street Journal.


Why is it that bitcoin and other cryptocurrencies have declined in response to the inflation rate rising? Should the response be the other way around? Bitcoin is anti inflationary so it makes more sense to use bitcoin to protect the value of your bitcoin. So, why was the response like this? What do you think so?

in theory bitcoin is designed to be anti inflationary because of its limited supply but in reality markets don’t always behave by theory.. when inflation data comes in hotter than expected.. it usually means the fed could keep interest rates higher for longer... higher rates make traditional assets like bonds and usd more attractive.. so big investors tend to pull money out of riskier assets like crypto... it’s less about bitcoins long term design & more about short term liquidity and investor psychology.. i would say people still see crypto as a high risk investment.. so it often reacts negatively in the short run to inflation shocks even though the narrative of bitcoin as an inflation hedge could still play out in the long term

[Mrbluntzy]

Bitcoin still reacts to some economic news and this is no different from other news that Bitcoin price has reacted to in the past, the price drop is not really so deep to actually say that it was the news that contributed to it. Bitcoin price is not stable and it doesn't continually surge high without dropping, it moves up and return back for correction and takes off again, except during bear market when price continues dropping.

[alastantiger]

I think people need to stop reading too much into every bitcoin price drop. It is a known fact that Bitcoin is a volatile currency/asset. It's normal for the price to fluctuate. Going from 120k to 115k in a week is not something we should read too much meaning into.

Agreed but the speculators won't want to let that go, they always want to read meaning into everything that's happening to the market but there are something that'll happen without needing a reason why it happened. Some people think they can know the reason behind Bitcoin price drop or increase but that's not true. Bitcoin should be left alone and we should focus more on buying Bitcoin instead of arguing why the price is dropping or not increasing. There are times when the price can increase despite the inflation rate dropping and the same can happen for when the rate doesn't drop. The market is full of emotions and people make decisions based on how they feel all the time.

[AirtelBuzz]

The Bitcoin price is never stable rather it keep moving up and down. I don't know why some calling this small dip as decrease in price or bearish season. It's normal for Bitcoin to take such dips on its way of moving up. If Bitcoin move up in price we will start hearing news that Bitcoin has started it's journey towards 150k. Bitcoin price is unpredictable thats why we need to be prepared for every price of Bitcoin both mentally and financially.

Of course it is true that we need to be mentally and financially prepared for every price move in Bitcoin because there will be volatility in the market. Even Bitcoin may still be at risk of a deep correction, Bitcoin may have touched a new high earlier, but since then the market index shows that Bitcoin has corrected 8 percent. It may still show a sustained upward trend but right now, one analyst has mentioned that Bitcoin could fall below $100k if sales are intense. Maybe at this moment everyone is hoping that the price will not reverse quickly but t is true that the sudden drop in Bitcoin's price may have increased short-term downside risk, even if you followed disciplined DCA strategy it is not impossible to deal with this moment.

[ZAINmalik75]

It is funny how the only kind of volatility some bitcoiners understand is price increase alone. A price decline no matter how small is seen as a threat to what bitcoin stands for. Anything could have influenced this price decline and this particular one does not call for panic.  Well, some persons might panic and those are the class of investors who are only there for the hype. Some investors' expectations of bitcoin and part of the reasons bitcoin price decline due to panic.

You snatched the words out of my mouth. It's so frustrating when people love it and enjoy and cheer up when they see the prices going up, but they start feeling like they are being attacked when the prices decline only by a small percentage. I mean, come on! If you enjoy it when the market is going up, you should also expect and understand that what goes up has to come down eventually, and volatility is not a one-way thing. If an asset has a volatile value, it goes up, and it goes down as well, and you should know this if you are into that asset.

News makers and influencers are always eagerly waiting for such things so that they can create some headlines with it, it's their job, and that's what they do for a living, but at least people who are watching them and reading such things should understand that these things are normal and nothing to be worried or concerned about.

[mindrust]

Who cares? This is just a healthy pull back. If it goes lower, you can buy more of them cheap coins. If it goes higher, you profit against the USD. Impossible to lose any money as long as you follow a disciplined DCA strategy. Stop listening to the FUD and keep buying monthly or weekly and see what will happen to your stash in 5 years. This is not the first time BTC does a pull back. It might even go below $100k or maybe even below $70k is possible if some more bad news come out to surface and it will be good for your portfolio in the long term because bitcoin always makes a come back and hits a new ATH. Just don't be greedy, stick with a solid investment plan and you'll be good.