decrypt.co
Bitcoin (BTC), the industry’s largest cryptocurrency by market capitalization, is down by 9% on Wednesday, wiping out most of its recent gains.
Following the official announcement of the U.S. Consumer Price Index (CPI) on Tuesday, the price of Bitcoin fell to a six-day low of $20,062, before climbing to around $20,380 at time of writing, according to data from CoinMarketCap.
While analysts considered that the CPI could be 8.1% compared to August 2021, the CPI was 8.3%, 0.2% higher than expected.
Some industry leaders were hopeful the slide would be short-lived, but not all forecasts came to pass.
“Bitcoin is down on the news that inflation for August came in higher than expected (8.3% instead of 8.1%). Bitcoin should be up today. Its properties dictate that it should be inversely correlated to inflation. The fact that it is down shows just how early it is,” Tyler Winklevoss, the co-founder of crypto exchange Gemini, wrote on Tuesday.
Bitcoin is down on the news that inflation for August came in higher than expected (8.3% instead of 8.1%). Bitcoin should be up today. Its properties dictate that it should be inversely correlated to inflation. The fact that it is down shows just how early it is.
— Tyler Winklevoss (@tyler) September 13, 2022
As investors anticipate higher interest rates in the coming months, traditional financial markets plummeted as well. The Dow Jones Index lost 1,276 points, or 3.94% at Tuesday close, while the Nasdaq fell by more than 5%.
More blood in the market
Elsewhere in the market, Ethereum (ETH), which is less than a day from the much-anticipated merge that will see it transition to a proof-of-stake (PoS) consensus mechanism, is down by around 7% on the day, trading hands at just over $1,600 at press time.
Several top cryptocurrencies have meanwhile posted double-digit losses, contributing to the market’s overall capitalization fresh drop below the $1 trillion mark.
These include the 9th largest coin Solana (SOL), which is down 12.6% over the past day, and Avalanche (AVAX), which shed 11% of its value in the same timeframe.