U.S. Inflation Surges to 30-year High, Driving Top Cryptos to Record Highs

This marked the fifth straight monthly increase of 5 percent or more, and it was the fastest annual surge since 1990.

According to the U.S. Labor Department, the inflation rate for consumer goods and services hit a 30-year high in October, representing an increase of 6.2 percent compared to the same time last year. This marked the fifth straight monthly increase of 5 percent or more, and it was the fastest annual surge since 1990.

As noted in its Wednesday announcement, the Labor Department published that the price hikes were broad-based, with the largest increases occurring in the categories of energy, shelter, food, used cars and trucks, and new vehicles. Specifically, the energy index rose 4.8 percent last month, as the gasoline index increased 6.1 percent – other major energy sectors rose as well. 

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From a month-to-month basis in 2021, inflation increased a seasonally adjusted 0.9 percent  in October – representing a more than double increase from the 0.4 percent rise in September, while also matching June’s 0.9 percent pace. This chart from the Bureau of Labor Statistics shows the monthly breakdown over the past four years.

After the inflation numbers were released at 8:30am ET yesterday, Bitcoin rose as high as $68,744 at 9:19am and Ethereum climbed to $4,848.61 at 11:14am – each setting new records. However, as of this writing, both dipped nearly 4 percent respectively. Both coins have been very bullish in recent months, doubling in price since this past June.

Possible reasons for the earlier price surge for these two leading cryptocurrencies are Bitcoin’s fixed asset supply of 21 million coins, and Ethereum’s recent move to limit its own supply by burning miner rewards as part of its EIP- 1559 upgrade in August. Both features are deflationary in nature and position both digital currencies as effective shields against macro-inflationary pressures.

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
Tor Constantino

Tor Constantino is a former journalist, consultant and current corporate comms executive with an MBA degree and 25+ years of experience - writing about cryptocurrencies and blockchain since 2017. His writing has appeared across the web on Entrepreneur, Forbes, Fortune, CEOWorld and Yahoo!. Tor's views are his own and do not reflect those of his current employer.