This earnings season has been rough for all sorts of equities, but this is especially the case for crypto stocks.
That’s because the Consumer Price Index report that came out on Thursday showed that inflation would reach a four-decade high of 6.6 percent in September.
Meanwhile, headline inflation topped forecasts by peaking at 8.2 percent, which is higher than Wall Street’s expectations of 8.1 percent.
Latest Inflation Data In Consumer Price Index Sends Bitcoin Tumbling
The inflation data from the Thursday report sent Bitcoin prices tumbling down to $18,100, which is close to its previous yearly low of $17,600.
As of now, the price has gone up by a modest $300. Last month, it fell by around 5 percent within an hour after the August inflation report was released.
In May, prices dropped by around 7 percent after the April consumer index report came out. Since then, the top-ranking crypto has somewhat recovered and is struggling to maintain an $18,000 level since the start of July.
Moreover, most US stock market averages dipped by over 2 percent. Fortunately, they’re bouncing back, with stocks like the S&P 500 closing the gap to 1 percent.
Mining stocks such as Core Scientific, Marathon Digital, and Riot Blockchain are trading lower by 7 percent.
Meanwhile, Argo Blockchain in the UK underperformed compared to the rest of the sector, going down by 16.5 percent. This comes after it made the decision to raise capital last week.
Analyst Downgrades Argo Recommendation From Buy To Neutral
In a research note dated October 12, Darren Aftahi, a Roth Capital analyst, downgraded his Argo recommendation from ‘buy’ to ‘neutral’ with a new $2 price target.
Aftahi argues that despite Argo taking steps to control its balance sheet, growth will eventually be limited. As a result, the mining company will lose its market share to competitors.
In addition, falling Bitcoin prices and increasing power costs aren’t doing Argo’s margins any favors. MicroStrategy holds 130,000 BTC worth $2.4 billion and fell by 6.7 percent, while popular crypto exchange Coinbase is down by 11.5 percent.
Thursday Report Shows Inflation Is Becoming More Difficult to Control
Figures in the latest consumer price index report show that inflation is becoming harder to control. This is despite the numerous interest rate hikes by the Federal Reserve that caused crypto prices and stocks to drop.
According to a partner of Dexterity Capital, Michael Safai, such an inflation reading is terrible news for traders. Nevertheless, he explains that knowing the outlook will be less optimistic than what everyone hoped for will prove beneficial.
It will allow some traders to pick up bargains, while others try to mitigate their losses, causing volumes to pick up.