The US consumer price index (CPI) jumped 0.6% in June, the largest month-to-month jump since 1991. This translates to higher prices and purchasing power for consumers as the dollar is able to buy less and less, and gives consumers using scarce assets such as cryptocurrencies and precious metals an edge in purchasing power.
According to the US Bureau of Labor Statistics, seasonally-adjusted core CPI grew 0.6% in both May and June of this year, representing a month-to-month growth more significant than any going back to 1991. This means that this summer, the cost of good and services for American consumers rose faster than any point in nearly 30 years.
Cryptocurrencies have nearly doubled in value in 2020
While dollar-denominated prices have risen in 2020, scarce assets such as cryptocurrencies have fared better as far as preserving purchasing power. Since January, the total value of cryptocurrencies has risen from about $191 billion to $363 billion at time of writing, an increase of 90%. Industry leaders Bitcoin and Ethereum have grown about 60% and about 194% respectively this year, from $7,195 to $11,535 and $130 to $383 per coin respectively.
More payments-focused cryptocurrencies have also grown significantly in value this year. Bitcoin Cash grew from $204 to $282 (about 38%), Litecoin grew from $41 to $54 (about 32%), and Dash grew from $42 to $90 (about 114%).
Bitcoin and Ethereum have seen significant fee spikes
While the value and therefore purchasing power of top cryptocurrencies has risen significantly, in some cases transaction fees have spiked as well. At time of writing, the median transaction fee (what would be considered a typical fee) for Bitcoin was about $2.93 per transaction, while Ethereum's fees rose to $1.57, likely precluding both networks from wide use for average retail purchases. Meanwhile, Bitcoin Cash, Litecoin and Dash all claimed median fees well below 1 cent USD per transaction, rates below those of common merchant payment processors.
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