Replays · US CPI · 14 Sep 2017, 13:30 UK
A routine CPI print on a very bad day for crypto
- Headline CPI
- +0.4% m/m, 1.9% y/y
- Core CPI
- +0.2% m/m, 1.7% y/y
- Bitcoin at 13:30 UK
- $3,650
- Low in four hours
- about $3,427 at 14:05 UK, 6.1% lower
- First hour
- -4.1%, 8.8× a normal hour, #7 of 117
- Same day
- BTCChina said it would stop all trading from 30 September
In September 2017 China was shutting down crypto trading. On the morning of 14 September, BTCChina, one of the country's largest exchanges, said it would stop all trading at the end of the month. US inflation figures came out a few hours later. Bitcoin's first hour after the CPI release was one of the ten largest in our data, but it is very hard to say how much of that was the CPI report.
The inflation report
Consumer prices rose 0.4% in August, up from 0.1% in July, and annual inflation rose from 1.7% to 1.9%. Core prices rose 0.2%. In 2017 these numbers were of interest mainly to bond traders. Crypto prices rarely reacted much to US data at that time.
What Bitcoin did
- 1 14:05 UK: Bitcoin about 6% below the release price
- 2 15:00 UK: a partial recovery
The first five minutes were quiet, with Bitcoin down just 0.4%. The selling then picked up. By 14:05 UK Bitcoin was about 6% lower, and Ether was 6.7% down after half an hour. US stock ETFs didn't move at all, which suggests the selling came from crypto, not from a broad reaction to the inflation data.
That is the main thing to take from this replay. The timing lines up with the CPI release, but the slow start and the lack of any move in stocks point to the China news, which was spreading through the crypto market all day.
The next day and the week
| Market | 1h | 4h | 24h | 1w | × normal hour |
|---|---|---|---|---|---|
| Bitcoin | −4.11% | −3.73% | −11.58% | +5.52% | 8.8× |
| Ethereum | −4.37% | −4.00% | −11.90% | +12.30% | 7.4× |
| Litecoin | −3.56% | −2.88% | −18.03% | −1.45% | 5.0× |
| XRP | −4.68% | −3.62% | −9.55% | −1.69% | 6.6× |
| S&P 500 ETF (SPY) | +0.06% | +0.12% | – | – | – |
| Nasdaq-100 ETF (QQQ) | +0.05% | −0.03% | – | – | – |
Change from the 13:30 UK release.
Selling continued into the evening. CNBC reported Bitcoin at about $3,385 at 21:17 UK, and it was 11.6% below the release price after 24 hours. Litecoin lost 18% over the same period.
Then the market turned. By the following Monday Bitcoin had recovered strongly from its Friday low, and it ended the week after the CPI release +5.5%. Ether did even better, +12.3%. For a CPI replay, this one mostly shows how a crypto-specific story can drown out macro data entirely.
Sources: release time and figures from the U.S. Bureau of Labor Statistics (public domain), first-print values via ALFRED, Federal Reserve Bank of St. Louis. Crypto: Bitstamp 5-minute candles; SPY/QQQ: IEX. No consensus forecasts are shown because they are proprietary; comparisons are with the previous release. “× normal hour” compares the first-hour move with the median move in matched quiet hours. How we measure it.