Ever since inflation became an issue, we been made to see a great correlation between cryptocurrency and other economic tools and indicators, including CPI. Currently, we are in a dump because it's expected that the next values would be poor.
Correlation Between Cryptocurrency and CPI
- Thread starter Golden9
- Start date
Some Dump. first time Bitcoin has been over $30,000 this year and those expectations are nothing but SWAG's (Scientific Wild Ass Guess).
In a way, CPI can affect the crypto market. With rising inflations and value of fiat money decreasing, people may turn to crypto as a better store if value thereby increasing the demand for cryptocurrency.
CPI is a macro indicator that often determines cryptocurrency/Bitcoin prices, especially in the short term when CPI is announced, crypto prices often fall. So in the short term between Crypto and CPI will be negatively correlated, especially against USD (SEC). But in the long term Bitcoin/crypto is still considered a hedge.
It is like what is happening to the dollar now. As it is falling and losing value, people may have to resort to Bitcoin and other cryptocurrency to hold their money.
Unfortunately, the dollar is very related to cryptocurrency because it affects its fluctuation.
