A new report by the U.S. Bureau of Labor Statistics shows that inflation is once again on the rise, causing crypto markets and leading digital asset Bitcoin (BTC) to dip.
According to the newest Consumer Price Index Summary, which tracks the value of goods and services, overall prices rose 8.6% year-over-year in May, marking the largest increase in over 40 years.
The data reveals that the price increases were broad and widespread with the energy index leading the way, rising a staggering 34.6% over the last year. Within the energy index, gasoline, fuel oil, and electricity rose 48.7%, 106.7% and 12%, respectively.
Food also witnessed a significant price increase, rising by 10.1% year-over-year, the first uptick of 10% or more since 1981. Indices for shelter, used cars and trucks and airline fares also saw sharp price upswings in May.
The crypto markets responded to the news by shedding $45 billion in market capitalization. Leading digital assets Bitcoin and Ethereum (ETH) declined 3.9% and 6.6%, respectively, in the past day.
Other crypto assets that saw significant losses include smart contract platforms Cardano (ADA), down nearly 7% in the last 24 hours, and Solana (SOL), which lost almost 6% of its value in the same timeframe.
According to market intelligence firm Santiment, investors are betting on a sustained correction across the crypto markets.
“With crypto markets falling once again in tandem with the S&P500 bleeding, funding rates on exchanges have turned into short-central. Both Bitcoin and altcoins have seen major shorts turn up at the highest rates in a month. If too much fear, uncertainty and doubt appears, this can cause a bounce.”
Amid surging inflation figures, MicroStrategy CEO Michael Saylor tells his 2.5 million Twitter followers that he believes the top digital asset by market cap will continue to rise.
“Inflation hasn’t peaked, and neither has Bitcoin.”
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The post Is Bitcoin an Inflation Hedge? BTC and Crypto Market Dip Amid Reports of Rising Cost of Living in the US appeared first on The Daily Hodl.