Cryptocurrencies fell on Tuesday, amid widespread selling in the market after the release of higher-than-expected CPI inflation data.
Bitcoin fell 3% to $48,535.17, according to Coin Metrics. This is after it exceeded the $50,000 barrier the previous day, reaching its highest level in more than two years.
The decline began when the US Bureau of Labor Statistics reported a larger increase in the consumer price index for January than economists surveyed by Dow Jones had expected.
This report led to a rise in the benchmark 10-year US Treasury bond yield by 10 basis points, and put pressure on risk assets as investors began to worry that the US Federal Reserve may not be able to cut interest rates as many times this year as they expected earlier. .
In this context, Strix Leviathan Chief Investment Officer Nico Cordero said: “For now, we expect the cryptocurrency to continue to rise.”
“However, investors should expect weakness in the long term if inflation continues to rise more than expected, which is contrary to the widespread belief that Bitcoin is an inflation hedge,” Cordero continued.
He said he believes bitcoin is not an inflation hedge but a measure of liquidity within the financial system.
