By Yasin Ebrahim

Investing.com. Bitcoin dropped from records Wednesday. Investors seemed to have cooled some of their bullish wagers while the popular cryptocurrency seems to be growing in popularity as an inflation-hedging hedge.

The price of the average home fell 0.4% to $66,528.4, after having previously reached a record at $68,990.

BTC’s earlier rally comes amid rising inflation fears, as data shows that U.S. consumer price rose at the fastest rate 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.  

Some others, however, attribute the bitcoin rally to the expectation of an influx in bitcoin futures exchange traded funds applications in the coming days, ahead of the Securities and Exchange Commission deadline of 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.