Bitcoin
Investors Buy $4.2 Billion in Bitcoin Ahead of US Inflation Data
In anticipation of the upcoming U.S. inflation report, savvy investors purchased 70,000 Bitcoin (BTC), signaling a strategic pivot toward cryptocurrency as a hedge against potential savings volatility.
This massive acquisition follows a significant sale of 1 million BTC in late 2023, underlining renewed confidence among long-term holders in the value of BTC.
Investors return to buy 70,000 BTC ahead of CPI report
Recent concerns about inflation and the declining value of fiat currencies have sparked renewed interest in alternative stores of value.
In fact, on-chain data from Glassnode reveals that investors are strategically accumulating more Bitcoin. Their actions suggest a belief in BTC’s lasting value, especially as it stabilizes above $60,000.
Bitcoin holder’s net position. Source: Glassnode
The USA Consumer Price Index (CPI) rose 0.4% in March and reached 3.5% last year. This number remains historically high and has significantly changed the value of a dollar compared to a decade ago when the inflation rate was just 0.8%.
The next US inflation report on May 15 also makes investors nervous, as it remains unlikely that the Federal Reserve will cut rates this year. For this reason, Neil Bergquist, CEO of Coinme, emphasizes the appeal of Bitcoin as a store of value.
He points out that unlike dollars held by banks, Bitcoin’s limited supply of 21 million BTC presents an inflation-resistant alternative.
“There will never be more than 21 million bitcoins. It has a fixed supply, unlike fiat currencies, and no one can change it. No one can arrive with a new policy, no one can be elected with a new idea and change that. It’s encoded on the bitcoin blockchain,” Bergquist explained.
See more information: Bitcoin Price Prediction 2024/2025/2030
Underlying inflation, which excludes the more volatile costs of food and gas, is likely to remain persistently high due to rising costs of shelter and essential services such as insurance and medical care. According to Bank of America, higher energy pricesdriven by rising gas prices, it should contribute to a “relatively firmer CPI print”.
As a result, Bitcoin could establish itself as a decentralized resource, solidifying its position as a hedge for traditional financial systems.
“If you keep dollars in your bank account during a period of rising inflation, then your balance will have less purchasing power than if you stored its value in Bitcoin,” concluded Bergquist.
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