In today’s bitcoin and cryptocurrency news, find out that after the U.S. Bureau of Labor Statistics announced its most recent CPI numbers, Bitcoin and Ethereum both experienced a decline. Meanwhile, the CPI declined more than analysts had anticipated in August. The information almost ensures that the Fed will proceed with another 0.75% interest rate increase at its upcoming meeting. Finally, the CEO of the experimental cryptocurrency bank Celsius has revealed to staff members a bold proposal to save the company, which filed for bankruptcy in July.
After an Hour, Bitcoin and Ethereum Are Down 5% Due to Rising US Inflation Figures
Original Source: Bitcoin, Ethereum Drop 5% in an Hour Amid Hot US Inflation Figures
Bitcoin and Ethereum fell after the latest CPI print on Tuesday.
Shortly after the CPI statistics were revealed, Bitcoin and Ethereum lost weeklong gains.
Today, the index showed an 8.3% increase in its basket of items from August. This is a 0.1% gain over July, surpassing predictions and suggesting inflation may be stubborn.
Bitcoin, the largest cryptocurrency by market size, is now trading at $21,450 after falling over 5% in one hour. However, it’s up 8% in the last week.
Ethereum is down 6% in the last hour and is trading at $1,625, according to CoinMarketCap.
The Nasdaq 100 and S&P 500 fell 2.7% and 2%, respectively.
What’s CPI?
Each month, the Consumer Price Index gauges the cost of milk and used cars. Economists use these numbers to gauge inflation. CPI statistics show the highest inflation in the US in 40 years. The August numbers were the same.
The slight uptick will likely give the Fed the go-ahead to continue rising interest rates, the central bank’s chief tool for cooling the economy. When the Fed raises rates, borrowing money becomes more expensive, which can lead to fewer investments, slower hiring, and less spending.
Raising rates affects financial markets, crypto included.
Today’s CPI report is the last before September 20. It’s projected that Jerome Powell would hike rates by.75 basis points.
Explaining Today’s Drop in Bitcoin, Ethereum, and Shiba Inus
Original Source: Why Bitcoin, Ethereum, and Shiba Inu Are Falling Today
Today’s inflation data dismayed investors.
Why
New inflation statistics indicated that consumer prices stayed higher than predicted in August, disappointing investors. As of this writing, the Dow has lost 719 points.
Bitcoin (BTC -9.81%) is down 5.6% in 24 hours, trading at $21,330 at 10:24 a.m. ET. Ethereum (ETH -7.92%) is down 8.8%, and Shiba Inu (SHIB -6.05%) is down 7%.
Why?
The U.S. Bureau of Labor Statistics (BLS) released the latest August Consumer Price Index (CPI) data this morning. CPI measures inflation for investors.
CPI climbed 0.1% from July and 8.3% from August 2021. The CPI was steady from June and July. In July, it was 8.5% higher year over year.
CPI was greater than expected. This almost guarantees that the Federal Reserve will raise its benchmark overnight lending rate by 0.75 percent at its meeting later this month. CPI boosted U.S. Treasury yields.
Energy prices plummeted 5% in August, led by a 10.6% drop in gasoline. Shelter, medical care, new vehicle, and restaurant food prices rose quickly.
Janus Henderson Investors’ Matt Peron said the CPI news was positive “Markets were hoping for a near-term “Fed turnaround.” We are not out of the woods yet and would maintain a protective stock and sector allocation.”
High inflation and Fed rate hikes have hit equities this year. Many hoped inflation had peaked after July’s better-than-expected CPI report. This research doesn’t disprove that, but it does suggest it may take longer than expected to reduce inflation.
Rising borrowing rates have hurt the 2021 crypto market. When rates climb, Treasury bill yields rise. This makes crypto investing riskier. The longer the Fed raises rates, the harder it will be for the crypto market to recover.
Given the August drop in consumer and energy prices, I expected a higher CPI report today. At least inflation is moving in a positive direction, although slowly.
High rent can be a concern for inflation because it’s a major price for consumers and a big proportion of their income.
I still prefer Bitcoin and Ethereum for the long run, especially because Ethereum’s “Merge” should strengthen the network. I avoid Shiba Inu until its protocol is upgraded.
After Suffering a Crypto Crash, the Celsius Network Plans Its Comeback
Original Source: Celsius Network Plots a Comeback After a Crypto Crash
Celsius Network’s collapse contributed to this spring’s crypto meltdown, which erased over $1 trillion from the market and devastated thousands of investors.
In July, Celsius declared bankruptcy. Now it’s back.
According to a tape of a Sept. 8 meeting with staff, Celsius CEO Alex Mashinsky described an aggressive strategy to revitalize the company. He and Oren Blonstein, another Celsius executive, said they wanted to focus on custody — keeping people’s cryptocurrency and charging fees on transactions. They codenamed the project Kelvin after the temperature unit.
Employees questioned Mashinsky, 56. He contrasted the rebuilding process to corporate turnarounds at some of the world’s most recognizable brands, including Pepsi.
Does it ruin Pepsi? Mashinsky questioned workers. Delta bankrupted. Do you avoid Delta because of bankruptcy?
Tiffany Fong, a Celsius client who posted YouTube videos about the disaster, received a meeting recording. The Times authenticated the recording.
Celsius often holds internal meetings to “plan for all possibilities,” a spokesman said.
The statement said, “Our personnel are key.” “We’ll continue to rely on them to help prepare final recovery plan criteria”
Celsius is trying a rebirth as crypto start-ups whose risky behavior caused the downturn recover. Do Kwon, founder of the unsuccessful cryptocurrency Luna, has also sought new crypto projects in recent months.
Celsius’s marketing promise of 18% interest on digital assets proven unsustainable. Customers could also use their deposits as collateral for loans and participate in “staking,” a way to earn rewards on crypto assets. Celsius has $20 billion and 1 million customers in 2021.
Celsius made hazardous investments that turned bad when the crypto market plummeted. Thousands of clients’ digital assets are still on the platform. Celsius owed customers $4.7 billion in court this summer.
Mashinsky doesn’t control Celsius’s fate. Any proposal must be approved by bankruptcy judge Martin Glenn in New York. A buyer could buy corporate parts.
Mashinsky said Celsius was negotiating with the Committee of Unsecured Creditors, or U.C.C., to begin operations.
The U.C.C. and most of the community have requested him to continue services, he added. They value these services and wish to continue using loans, staking, custody, etc.
After meeting with Celsius representatives, the committee had worries about Mr. Mashinsky’s continued engagement and substantial questions regarding the Kelvin plan, a source said.
Committee lawyers didn’t comment.
Celsius’s restart plans are uncertain. The company’s Bitcoin mining operation could be overhauled. Mashinsky and Blonstein discussed holding crypto assets for Celsius’s users. Mr. Mashinsky may charge users for a safe crypto wallet.
Celsius once touted itself as a zero-fee service to encourage customers to “unbank” Executives consider a new strategy.
Mr. Blonstein told employees, “If our business is custody and our customers stake somewhere, trade assets, or take a loan against an asset as security, we should be able to charge a commission.”
Customers have raised money to employ lawyers and plotted strategy in Telegram group chats since Celsius filed for bankruptcy. Mr. Blonstein said the company planned a “unique crypto method” to reimburse clients, but he wouldn’t elaborate.
Blonstein said Celsius was on a “hero’s journey” to redemption.
“This hero has a goal. They have an initial success, slip, and have a sad period, he added. If we succeed, it will be an unprecedented success.
Mashinsky said Apple pondered bankruptcy.
“Are we going to be like firms who were great or almost great but disappeared?” he asked. “Community supports us.”
Summary of today’s Bitcoin and Cryptocurrency news
Overall, despite its small size, the rise will probably grant the Federal Reserve permission to keep raising interest rates, which is one of the main tools the central bank uses to slow the growth of the economy. Borrowing money costs more as the Fed rises interest rates, which might result in fewer investments, slower hiring, and ultimately less spending.
In addition, inflation appears to be heading in a generally positive direction, albeit at a slower rate than the market would prefer. Since rent is such a big price for consumers and can eat up a sizable portion of their income, it poses a challenge for inflation and may lead to its persistence.
Finally, customers of Celsius, who lost access to their cryptocurrency when the company declared bankruptcy, have been accumulating funds to hire lawyers and plan their next move on Telegram channels. Mr. Blonstein stated during the meeting that the company was considering a “unique crypto approach” to compensate clients but did not provide further specifics.
