Bitcoin & Ether Prices Drop as UK Inflation Hits 30-Year High

• The UK inflation rate rose to 6.8% in April, the highest since 1992.
• The higher-than-anticipated rate caused traders in broader equity markets to respond negatively.
• Bitcoin and Ether prices dropped as a result of this news, with Bitcoin trading below the $27,000 level.

UK Core CPI Hits Highest Level in Three Decades

The UK’s core Consumer Prices Index (CPI) rate has risen to 6.8%, surpassing expectations and marking its highest level since 1992. The core prices excluding food, energy, and tobacco recorded a month-on-month acceleration from 6.2% in March to 6.8% last month causing traders in broader equity markets to respond negatively resulting in a general decrease for major cryptocurrency prices – including Bitcoin and Ether – which dropped below their 24-hour highs upon release of the news.

Headline CPI Inflation Stands at 8.7% Year-On-Year

According to the Office for National Statistics, headline CPI inflation stood at 8.7% year-on-year, a decrease from 10.1% in March but still higher than the consensus estimate of 8.2%. This was due mainly to the decline in energy prices and diminishing impact of Russia’s invasion of Ukraine on annual consumer price comparisons witnessed during April 2021 although there is still pressure on the Bank of England to continue raising interest rates over the coming months given that inflation has exceeded expectations for three consecutive months now .

Impact on Cryptocurrency Prices

CoinMarketCap data suggests that Bitcoin has slipped from its 24-hour high of $27,386 trading at $26,729 at press time with Ethereum following suit with a 2% drop trading at $1,816 from a 24 hour high of $1,859 triggering an overall market bleed as most coins are currently trading in the red with global cryptocurrency market cap decreasing by 1.82%.

Conclusion

The unfavorable inflation data originating from the UK released on May 24th 2021 have significantly impacted cryptocurrency prices causing Bitcoin and Ether prices slide below their respective 24 hour highs while also triggering a whole market bleed with global crypto market capitalization decreasing by 1.82%.

Takeaway

Though this unfavorable economic news could be considered detrimental for investors it should be noted that this could also serve as an opportunity for those who believe that cryptocurrencies offer better returns than traditional assets over long term investment horizons given their historically superior performance when compared against legacy assets such as stocks or gold over long term investment horizons thus making them attractive investments even amidst current uncertain economic conditions