On Tuesday, Bitcoin stock (BTC-USD) followed markets down after the consumer price index data for August came in higher than predicted, causing Bitcoin stock to fall.
Movement of Bitcoin Stock
According to Coin Metrics, the value of Bitcoin stock (BTC-USD) dropped by 9.66% on Tuesday, reaching a price of $20,249.8 per coin at 4:00 p.m. ET. Since June 18th, this was the worst day for bitcoin.
The loss in price represents an opposite movement to prior gains. According to Coin Metrics, the Bitcoin stock (BTC-USD) price reached a one-month high of $22,764.49 before declining.
The rise, which sent the digital asset back over the critical psychological $20,000 barrier last week, was fueled by the weakening of the United States dollar ahead of Tuesdays inflation data, which was anticipated to reveal that inflation had calmed considerably. The much-anticipated upgrade to the Ethereum network also resulted in a price increase for the digital token.
But figures from the Consumer Price Index for August indicated that inflation increased from the previous month even though the price of gasoline decreased. As investors on Wall Street expected more aggressive interest rate rises from the Federal Reserve, the U.S. dollar value rose, and equities saw a significant decline.
As interest rates rose, investors looked to reduce their exposure to riskier assets such as cryptocurrency.
The Crypto Effect
The price of Ether, the token that operates on Ethereum, decreased by more than 6% on Tuesday, only a few days before the highly anticipated Merge, which will take place between September 13 and 15. In the course of the merging, Ethereum will make the transition from a paradigm that employs proof-of-work to one that uses proof-of-stake.
This change will assist in making Ethereum more secure and efficient in its energy use. Additionally, it should help lure new investors to the cryptocurrency, which now holds the second-largest market valuation behind bitcoin.
However, the precise time when the Merge will take place is unknown. Its also possible that it will take longer than the three days that investors are monitoring right now.
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Author: Okoro Chinedu
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