Key Takeaways:
- Bitcoin jumped past its previous record and secured a new all-time high at $69,000
- US inflation data for October showed prices increased 6.2%, the fastest pace in 30 years
Bitcoin Jumps to a New Record High of $69,000
Bitcoin, the original cryptocurrency, lived up to the expectation that it protects against inflation. In other words, the price of bitcoin jumped to a new record high right after the US consumer price report was released.
That said, bitcoin peaked Wednesday to a fresh record high of $69,000, breaking its previous record of $68,480 set Tuesday. In detail, the orange coin erased its intraday loss and quickly gained 5% on the day, reaching its new top.
The catalyst for the accelerating price was the US consumer price report. More specifically, the report, measuring inflation, showed prices increased at their fastest pace in over 30 years.
With this in mind, the report highlighted inflation for October reached 6.2% compared with the same month a year ago. An inflation print this high was last seen in 1990.
Bitcoin Acting as a Hedge Against Inflation
Against this backdrop, bitcoin had an opportunity to flash its inflation-hedge characteristics. To elaborate, the leading token is often labeled as a hedge against inflation. This means the cryptocurrency is purchased for its resiliency against higher prices and devaluing currencies.
Due to its limited supply of 21 million coins, bitcoin is considered a safe haven when consumer prices rise. As in the case of the October inflation report, bitcoin gained about $3,000 right after the data came out.
The fresh inflation numbers suggest that higher prices might not be transitory as the Federal Reserve says. More precisely, the US central bank expects prices to moderate to lower levels. But recently, Fed officials, Chairman Powell included, have said inflation has been more persistent than anticipated.
To this end, market participants have chosen to buy bitcoin and preserve the value of their wealth from depreciating.