December 5, 2022

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Bitcoin is facing a critical week with inflation figures from the Netherlands, US and China

Bitcoin is facing a critical week with inflation figures from the Netherlands, US and China

2022 will be characterized by inflation and central banks’ response. Unfortunately for us, it looks like we’re not quite there yet Bear market It will take some time. Another gauging moment is planned for next week, as all sorts of countries announce inflation figures.

Inflation is a week

We start the week with our own inflation on Tuesday morning at 6.30 am Dutch time. The previous reading came in at an extreme figure of 14.5 percent. Inflation is currently expected to be 14.4 percent. In that sense, despite the ECB already raising interest rates to 2 percent, there is still little positive movement. However, who would have predicted a year ago that the Netherlands would now have inflation of 14.5 percent.

Most people are unaware of any harm. In that sense, this episode of inflation could be good publicity for Bitcoin in the Netherlands. Bitcoin has an absolute scarcity of 21 million units and is therefore naturally inflation resistant. Some would say that Bitcoin is currently failing as a hedge against inflation, but it remains to be seen what happens after the flight to the US dollar.

We cross the Atlantic Ocean

Speaking of the US dollar, let’s cross the Atlantic to the US, where we’ll get the new Consumer Price Index (CPI) on Thursday afternoon. The previous reading was 8.2 percent, this time the expectation is 8.3 percent. Core inflation is still at 6.6 percent and is expected to be 6.5 percent. Core inflation is inflation minus food and energy.

This is a strange way to measure inflation because food and energy are so important. Oddly enough, this metric is preferred by the Federal Reserve. So they mainly look at these statistics to determine if things are going in the right direction.

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China will also release its consumer price index next week on Wednesday, November 9 at 2.30am. The former was 2.8 percent and the latter 2.5 percent. Then it’s Germany’s turn at 08:00 on Friday, the previous one was 11.6 percent, and the expectation for this is 11.6 percent. Overall, there is still little progress, which is not a good thing for Bitcoin.