Perceived store-of-value assets like bitcoin and gold are rising as investors reassess the stickiness of inflation in the wake of a hotter-than-expected October reading in the U.S. consumer price index (CPI).The bitcoin (BTC) price has increased by nearly $3,000, hitting a new record high of $68,950, since the Labor Department’s CPI report was released at 13:30 coordinated universal time (8:30 a.m. ET). The report showed that the cost of living in the U.S. rose 6.2% year-on-year in October, marking the highest since 1990. Core inflation, which strips out the volatile food and energy component, rose 4.6%, the highest since August 1991.The cryptocurrency is now trading 2.7% higher on the day. The descending trendline breakout seen on the hourly chart has exposed the psychological resistance at $70,000.#CPI comes in above expectations at 6.2% overall and 4.6% core. Markets go back to pricing in faster and earlier #Fed #RateHikes. pic.twitter.com/klz9rXne5P— Kathy Jones (@KathyJones) November 10, 2021Bitcoin rallied 40% in October. The popular narrative was that the launch of a bitcoin futures-based exchange-traded fund (ETF) would bring in mainstream money, pushing up demand for the cryptocurrency and thus the price. But analysts at JPMorgan attributed the rally to rising inflation expectations and bitcoin’s appeal as a hedge against rising prices. The trend looks set to continue, with equity markets showing few signs of stress. Futures contracts tied to the Standard & Poor’s 500 Index of large U.S. stocks were down a meager 0.2% at press time.Gold, a traditional inflation hedge, has broken above a long-held resistance at $1,830 to trade at a five-month high of $1,853.The U.S. five-year “breakeven rate” – a gauge of inflation expectations over the next five years, as derived from bond-market indicators – has jumped above 3%, the highest since at least 2001, according to Bloomberg.What will the Fed do?Traders in the market for futures contracts on the Federal Reserve’s key interest rate now see a 38% chance of a rate hike in June 2022, up from 28% prior to the CPI report. Meanwhile, the two-year U.S. Treasury yield, which is more sensitive to rate hike expectations than the 10-year yield, has jumped eight basis points to 0.5%.Should markets price in faster and earlier rate hikes, bitcoin’s momentum may slow. St. Louis Federal Reserve President James Bullard told CNBC on Tuesday that the U.S. central bank may hike its benchmark rate twice in 2022, after winding down its $120 billion-a-month bond-buying program.