Bitcoin traded down by 4.1% on Nov. 14 following US inflation data that exceeded market expectations. This drop coincided with a decline in S&P 500 index futures, leading traders to question Bitcoin's inflation-hedging potential in a persistently inflationary environment. The October US Producer Price Index (PPI) indicated a 2.4% annual increase, above the 2.3% consensus, yet the Federal Open Market Committee is still expected to implement a 0.25% interest rate cut in December. However, skepticism exists regarding the Federal Reserve's rate-cut trajectory amid persistent inflation. Historically, Bitcoin has thrived during inflationary periods, but previous government stimulus measures affected its performance. Trader caution remains as the labor market shows signs of strength, but corporate earnings pressures loom. The recent government measures proposed by the Trump administration could further challenge risk assets. Bitcoin's role as an alternative reserve asset may diminish if the government successfully curbs spending, though it remains valued for its scarcity and predictability. Despite short-term inflation concerns, Bitcoin's path towards the $100,000 mark may remain intact.

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