More On: Bitcoin
Thursday, shares of cryptocurrency exchange Coinbase fell more than 11% after the Consumer Price Index showed that inflation kept going up in September, which was not what Wall Street expected.
Bitcoin and other stocks that depended on the success of cryptocurrencies also took a hit. Riot Blockchain, Marathon Digital, and Microstrategy all went down by about 5%, while Block (formerly Square) went down by about 7%.
The new inflation numbers from the Bureau of Labor Statistics also sent the markets in general down. But crypto stocks fell more than major indices like the Nasdaq Composite, which fell by about 1.5%, and the S&P 500, which fell by about 0.8%.
In the past few months, when inflation has gone up, Wall Street has been very unstable. That's because if inflation news is bad, the Federal Reserve may raise interest rates even more, which would slow economic growth even more.
With Thursday's CPI data, it's likely that the Fed will raise interest rates by 0.75 percentage points in both November and December. This makes investors less interested in riskier assets like cryptocurrencies and equities related to cryptocurrencies.
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