Bitcoin (BTC) and all other risky assets are subject to the macroeconomic effects of rising inflation.
According to investor Tyler Winklevoss, founder of Winklevoss Capital Management and cryptocurrency exchange Gemini, the market price of BTC and other digital assets fell due to the United States (US) inflation data published yesterday for the latest reading for August.
For the record, the inflation rate decreased from 8.5% in July to 8.3% in August, but failed to reach the forecast of 8.1% thus inviting an interesting reaction to the crypto market after witnessing a drastic jump in the US dollar currency.
As the inflation rate showed a worse value than expected, the previous rally of the cryptocurrency market, including BTC, has lost its momentum.
Meanwhile, crypto traders had previously expected BTC, Ethereum (ETH) and altcoin prices to surge if the Federal Reserve raised interest rates to 0.75 basis points, but the opposite happened.
This is because, not only has BTC fallen by 6.25% in the last 24 hours after holding its position at the $20,000 price level, but the fall also wiped out most of the gains it accumulated during last week's bullish pattern
Meanwhile, the price of ETH fell 7.29% to $1,590 including the majority of cryptocurrencies in the top 100 experiencing single to double digit percentage losses.
Explaining Winklevoss, Anthony Scaramucci of SkyBridge Capital stated that BTC is no longer strong enough to survive inflation, although he previously believed that BTC is an inflation hedge asset.
