Bitcoin Briefly Bounces Following Record November Inflation Numbers

US inflation numbers for November are out, and they’re looking bullish for long-term Bitcoin HODLers. According to Labour Department data, The Consumer Price Index (CPI) has risen by 6.8% from November 2020 to 2021. As with last month, Bitcoin’s price briefly jumped on the news, before quickly descending back below $48k.

Prices Keep Rising

The US Bureau of Labour Statistics released November’s CPI data at 8:30 am EST this morning. The report indicated a 0.8% increase on last month’s already record inflation, which was up 0.9% from September. This means prices are rising faster on an annualized basis than they have in nearly 40 years.

“The indexes for gasoline, shelter, food, used cars and trucks, and new vehicles were among the larger contributors.” reads the report. Energy is up 3.5%, gasoline 6.1%, and food 0.7% on the month alone.

The numbers are sobering, casting away all notion that inflation is a “transitory” phenomenon. Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell both recently admitted the description is inaccurate, after using it for months.

Commonly cited causes of such inflation include global supply chain disruptions and labor shortages. However, Bitcoiners are more inclined to blame the increasing money supply on this year’s higher prices. As Mark Mobius pointed out, 40% of the total M2 money supply was printed within the last 18 months alone.

Meanwhile, US debt continues to climb, in what Senator Cynthia Lummis calls a “predictable, looming, massive issue.” In October, Congress agreed to raise the debt ceiling by $480 billion to keep the country from defaulting. Two days ago, they voted to raise the ceiling again by an estimated $2 trillion.

Bitcoin Reacts

When October’s inflation numbers were released, Bitcoin spiked to an all-time high of $69k, before beginning its steady decline for the remainder of the month. It demonstrated similar behavior today, peaking at $50k before descending to $48k within a few hours.

Bitcoin is gaining recognition as a strong inflation hedge due to its strictly fixed monetary policy and gains against the dollar over the last decade. Bloomberg even called it “the best inflation hedge around” in a recent article.

Young people – especially athletes – are growing intrigued by this quality. From Russell Okung to Saquon Barkley, the desire for a rapidly appreciating asset that protects one’s savings is palpable.