coincodex.com
Key highlights:
- The U.S. CPI (Consumer Price Index) figures for September show that inflation in U.S. is higher than expected
- This further cements the likelihood that the Fed will raise interest rates by another 0.75% in November
- Both the stock markets and the crypto markets have reacted negatively to the prospect of higher interest rates
- The Bitcoin price fell as low as $18,300
U.S. inflation figures for September come in higher than expected
Cryptocurrency markets have tumbled as the latest CPI (Consumer Price Index) figures for September, released by the U.S. Department of Labor, show that inflation in the U.S. is higher than forecasted.
The overall CPI is up 8.2% compared to one year ago, while the "core" CPI (which excludes food and energy) is up 6.6%. The figures for August were 8.3% for the overall CPI and 6.3% for the core CPI.
The markets seem to be interpreting these figures as a confirmation that the U.S. Fed will continue raising interest rates aggressively. CNBC writes that traders are assigning a 98% chance that the Fed will raise its benchmark interest rates by 0.75% for the fourth consecutive time.
Rising interest rates have a negative impact on stock markets, and there has already been a significant reaction. S&P 500 futures are down about 2% on the news, reaching new year-to-date lows. Nasdaq-100 futures are down 2.8% on the day and are also at year-to-date lows.
S&P 500 futures dropped significantly on the U.S. CPI figures for September.
Crypto markets responded to the CPI figures with a dump
By now, cryptocurrency investors are already accustomed to the fact that the crypto markets no longer move independently of mainstream markets. The turmoil caused by the hotter than expected CPI figures has also been reflected in the cryptocurrency markets, with the total crypto market cap sliding by 4.4% and falling below $900 billion. The total crypto market cap is now approaching a new year-to-date low.
The cryptocurrency market’s two flagship assets, Bitcoin and Ethereum, have both seen substantial losses—Bitcoin is down about 4% on the day, while Ethereum has performed worse with a 6.5% price drop. The downwards move could put further pressure on the $18,000 price level, which was only broken this year for a very short period of time on June 18.
86 out of the top 100 cryptocurrencies by market cap have lost value in the last 24 hours, with 58 of them losing 5% or more. Some of the worst performers today are Convex Finance, Green Metaverse Token and Klaytn.