Can a rising CPI boost Bitcoin? 3 reasons BTC price is rebounding above $36K
June 9, 2021. Summarized by summa-bot.
Compression ratio: 25.2%. 1 min read.
Economists expect the annual Consumer Price Index (CPI) to climb to 4.7%, which may boost BTC price, according to one analyst.
Bitcoin (BTC) price reclaimed $36,000 heading into the New York session Wednesday as investors awaited fresh data on inflation in May and El Salvador approved a bill that made cryptocurrencies a legal tender in the country.
On the other hand, bulls kept projecting Bitcoin as a primary tool against inflation, with Mike McGlone, the senior commodity strategist at Bloomberg Intelligence, noting that the cryptocurrency's possibility to reach $40,000 in the coming sessions is higher than reaching $20,000.
"Given the current pullback in Bitcoin, the fact that analysts expect the U. S. CPI to rise to 4. 7% may be a serious factor driving BTC/USD higher [. . . ] Eventually, Bitcoin could be a big winner in the event inflation continues to rise, which certainly looks to be the case. "
A higher rate tends to sap investors' appetite for hedging assets like Bitcoin and gold.
But, according to Yuriy, a rate hike would not hurt Bitcoin's demand among investors, noting that expensive lending would reverse gains across the U. S. stock market indexes.