BTC Falls Following High Inflation in the U.K.May 29, 2023
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The prices of bitcoin, several crypto stocks, and other leading altcoins have fallen somewhat at the time of writing following fears surrounding higher-than-expected inflation figures stemming from the United Kingdom.
Inflation was Much Higher Than Expected in the U.K.
Inflation in the U.S. and for all its allies has been a serious problem over the past two years. There were several antics taken during the days of the COVID pandemic, one of which was constantly printing new money as a means of giving people the funds they needed to survive and make it out alive at the end of the day. This caused the values of the U.S. dollar and the U.K. pound to dip heavily.
However, there has also been a wide array of simplistic (and dumb) economic plans put in place by the likes of incompetent leaders such as Janet Yellen and Joe Biden, which have ultimately caused the problems surrounding inflation to expand well into 2022 and 2023.
Co-founder and CEO of Mudrex Edul Patel commented that U.K. inflation has grown by more than ten percent in just the last 12 months. He stated:
As is typical with unexpected events, the market responded with a reaction, causing investors to move away from the riskier assets. It may take some time for investors and traders to evaluate the potential impact of the inflation data and recover from the event.
Ilya Volkov – CEO and co-founder of You Hodler – says that despite the recent dips in its price, bitcoin is still in an “upward trend channel” given that roughly one-fifth of the world’s total bitcoin supply stays holed up by long-term holders that refuse to keep it on exchanges and similar platforms. He said:
Over the last few days, the crypto market has experienced relatively high volatility while many on-chain indicators are surprisingly consistent and tell us about the potential of further growth.
However, the slips for crypto are still relatively disappointing in many ways given BTC recently hit a new ten-month high by striking the $30K mark. In addition, Ethereum also shot beyond the $2,000 price mark after it went through the recent Shapella upgrade. Joel Kruger – market strategist at LMAX Group – said:
We believe the pullback we’re seeing is more a function of an overdue correction following some impressive moves and possible profit taking on broader risk-off flow in global markets than anything crypto specific.
More Rate Hikes Coming?
Kruger also commented that there’s likely to be further rate hikes in the U.S. and other countries given inflation remains a pressing problem. He mentioned:
There have been some signs the Fed could be more aggressive towards higher interest rate policy than what the market is pricing, which has been driving yield differentials in the U.S. dollar’s favor, while weighing on sentiment.
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