- Inflation rate increases by over 9%, which is the highest it has been in four decades.
- The prices of BTC, ETH, SOL, DOGE, and ADA have all been affected by the news and the global crypto market temporarily went below $900B.
- Bitcoin maximalists say the asset may be used as a hedge against inflation, although it hasn’t in recent months.
According to the Federal Reserve’s latest inflation report, the U.S. economy has 9.1% year-over-year inflation in June, which is the highest rate in 40 years. The measure rose by 1.3% from a month earlier, marking the largest month-on-month gain since 2005, as higher prices for fuel, housing, and food were taken into account.
The release was followed by a reduction in the value of hazardous assets. Ethereum’s (ETH) price has dropped by 4.4% over the course of the last few hours, and the prices of Cardano (ADA), Solana (SOL), and Dogecoin (DOGE) have followed suit. According to statistics provided by CoinGecko, a majority of the top 100 cryptocurrencies by market capitalization had a decline of at least 4%.
The total market value of cryptocurrencies momentarily dropped below the $900 billion barrier after a drop of 2.5% in the previous 24 hours, with the majority of losses occurring during the course of the most recent few hours.
Despite those who dub themselves “Bitcoin maximalists” contending that the asset may be used as a hedge against inflation, Bitcoin does not seem to be functioning in this capacity in recent months.
The cryptocurrency market was already negatively affected by the most recent decline, and it has been fighting a losing battle to recover its footing for the last two months.
As a result of the failure of the Terra stablecoin in May, a contagion spread among large cryptocurrency funds and lenders. This kicked off a domino effect across the cryptocurrency sector as a whole, and it is possible that this impact is still ongoing.