Many factors have brought bitcoin and cryptocurrencies down to their present low price levels. However, investors are holding on tight, and are even adding to their positions at what may be cheap prices.
With the Consumer Price Index figures for June now in, inflation in the U.S. has climbed to 9.1% – a 4 decade high. Such an inflation reading is having a very negative effect for crypto, and on the news, bitcoin has crashed under $19,000. A move down to retest the $17,500 level could be on the cards.
However, as quoted by Glassnode, in an article on Reuters, “the market is approaching a HODLer-led regime”. Among the various classes of HODLers that are still stacking bitcoin, are the shrimps and the whales.
The whales are classed as those that have more than 1,000 BTC, and these large mammals have been adding 140,000 bitcoins every month, which is the highest rate since January of 2021.
The shrimps on the other hand are the investors that hold less than 1 BTC. Tiny holders they may be, but according to Glassnode, they are adding 60,460 BTC a month to their portfolios, said by Glassnode to be “the most aggressive rate in history”.
Opinion
With the new inflation data just in, bitcoin is likely to be tested to the limit. If it can survive by perhaps continuing sideways over the rest of the month and into the next, then we might start to see inflation subsiding and a rebound for the cryptocurrency sector.
Many actually question whether the inflation figure quoted by the Federal Reserve is actually a true reflection of inflation. On the Shadowstats site, inflation is calculated on the Federal Reserve’s original methodology back in 1980. That figure is currently at around 17%.
Surviving such times would be a true test for bitcoin, and given the fact that fiat currencies are becoming devalued at an ever-increasing rate, surely many more will look to protect their wealth with hard money that they would own and be able to spend at will, without any government or central bank being able to interfere.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice
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