By Yasin Ebrahim
Investing.com - Bitcoin slipped from record highs Wednesday, as investors appeared to cool some of their bullish bets even as the popular cryptocurrency appears to be enhancing its reputation as an inflation hedge.
Bitcoin fell 0.40% to $66,528.4, but had earlier hit a record high of $68,990.
The earlier rally in BTC comes as concern about elevated inflation heats up following data showing U.S. consumer prices rose at their fastest pace since 1990.
"If there was any lingering doubt, this morning’s inflation report confirms consumer prices are officially out of control," Stifel said in a note.
In the wake of elevated inflation, bitcoin’s reputation as a store of value, or “digital gold” - given its limited supply and its outsized returns over a long period – has strengthened its narrative as a hedge against elevated price pressures.
The retreat from record highs comes even as signs emerged earlier this week that investors continue to move BTC from exchanges to private storage, pointing to ongoing investor appetite to hold the popular crypto for the long term.
“Despite hovering just below ATHs, on-chain activity remains only marginally above bear market levels. Additionally, exchange balances continue to deplete, and miner hashrate and USD revenue are approaching new highs,” Glassnode said in its weekly report published earlier this week.
Others, meanwhile, attributed the recent rally in bitcoin to expectations for an influx of bitcoin futures exchange traded fund applications in the coming days ahead of the Securities and Exchange Commission deadline on Nov. 14.
“Optimism is growing in the market … this push could be caused by ETF anticipations, so be aware of the SEC deadline on November 14th,” Arcane Research added.