Binance CEO Expects Inflation Rate to Rise by 500%
The current data on inflation in the US caused a strong hysteria and panic in several sectors of the market. Various expectations and reactions surface after data messages. It seems to be a fact that even the cryptocurrency space is now exposed to inflation and other macroeconomic factors.
According to reports from the U.S. Bureau of Labor Statistics, different markets are filled with different opinions. However, according to the published data, since June last year, the consumer price index has increased by 9.1%. This value is greater than the forecasts of some analysts.
However, Binance CEO Changpeng Zhao (CZ) seems to hold the opposite opinion regarding the published inflation data. According to CZ Binance, inflation of 9.1% is a magically low value for some surrounding events.
Changpeng Zhao stated that the supply in US dollars increased by 80%, which is equivalent to a 5-fold increase in the initial supply, due to more banknote minting. Thus, it is expected that the value of inflation will be about 500%. From CZ's point of view, such a calculation should depend entirely on the growth of the money supply over a given period.
Twitterati quickly offered a corrective response to Changpeng Zhao's instructions regarding inflation data. In a further explanation, inflation calculations should take into account various supply and demand factors.
Several markets collapsed due to high inflation data
With the publication of inflation data, the value of Bitcoin fell below $19,000 in just a few minutes. Unfortunately, BTC was not alone in its downward movement. Other traditional stocks, such as the S&P 500, Nasdaq and Dow Jones, have fallen sharply due to high inflation.
The cryptocurrency market as a whole has undergone significant changes, as inflation continues to rise every year. The consequences create massive market value instability in the first half of 2022. Subsequently, the market has fallen by more than 70% since the beginning of the year, which caused several threats to the insolvency of many firms.
Before the inflation data was announced, market consensus forecasts were expecting 8.8% for the June consumer price index. The predicted value was 0.3% lower than in the report of the US Bureau of Labor Statistics.
More prominent figures in the crypto space also reacted to high inflation. Among them are Michael Saylor, Tyler and Cameron Winklevoss. In their opinion, the high cost has improved the current situation with BTC and even the wider spread of cryptocurrencies.
The red flag of the inflation rate indicates a sharp increase in interest rates by the Federal Reserve. This trend is a big minus for the entire cryptocurrency ecosystem.
Bitcoin felt very bad with the growth of credit rates. Its poor performance has also led to a decline in the crypto market.
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