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The most U.S. inflation in four decades is reviving talk of Bitcoin being a hedge against rising prices and is lifting the coin to its highest in a week.

The largest cryptocurrency by market value rose as much as 3.1% to $44,001 Wednesday, following the release of the consumer price index, which climbed 7% in 2021. That means inflation in the U.S. registered its biggest annual gain since 1982. Some market participants had speculated that the increase would be higher. 

“The fact the inflation number was not as high as some of the whisper numbers should help risk assets of all stripes today," said Matt Maley, chief market strategist for Miller Tabak + Co.

Crypto proponents have long argued that Bitcoin and other digital assets, on account of their being an idiosyncratic asset class, could act as hedges against swings in other areas of the financial market. Only 21 million Bitcoin will be put into circulation under the computer protocol that governs issuance, though that figure isn’t expected to be reached for several decades.

Other cryptocurrencies also rose on Wednesday following the data release. Ether was up 3.8% to $3,353 as of 9:05 a.m. in New York, while the Bloomberg Galaxy Crypto Index added 3.1%.

This story has been published from a wire agency feed without modifications to the text.

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