US Consumer Price Index reached 7% in December 2021. Fears of high inflation are pushing investors to invest in cryptocurrencies. Bitcoin jumped to $44,000.
The first cryptocurrency reacted with a sharp rise to $44,000 after the US Department of Labor published data on consumer price changes in December 2021. The CPI in December of last year reached 7%, exceeding even the multi-year November record of 6.8%. Immediately after the publication of the report, the bitcoin price went up sharply. If a few days ago bitcoin fell below the $41,000 mark, now the cryptocurrency reached $44,000.
Many investors regard bitcoin as a hedge tool to withstand inflationary risks. Given that the US Federal Reserve (Fed) already announced plans to raise the key rate and accelerated phasing out of asset buyback program, investors are reasonably afraid that such Fed’s actions would neutralize the attractiveness of fixed income assets, such as bonds, which are traditionally used by market participants in conditions of market instability.
Earlier, JPMorgan Chase, one of the world’s largest investment banks, conducted a survey on the future of bitcoin in 2022 among Wall Street investors. When asked what level bitcoin would reach by the end of 2022, only 5% answered that the cryptocurrency could rise to $100,000. The most popular answer was $60,000. Nearly a quarter of respondents, or 23%, said they expected bitcoin to fall to $20,000 by the end of 2022, while 20% said bitcoin would remain at its current level of around $40,000.