U.S. consumer prices rose to 4.2% in the 12 months through April, the fastest pace since 2008, the Labor Department's Bureau of Labor Statistics (BLS) reported Wednesday.

The latest reading on the Consumer Price Index (CPI) inflation report exceeded economists' average estimate for a 3.6% increase, and it compares with a 2.6% increase reported last month.

The CPI report is particularly important for some cryptocurrency investors who view bitcoin (BTC) as a hedge against inflation and ongoing currency debasement. However, concerns about higher inflation beyond the 2% threshold could cause the Federal Reserve to tighten monetary policy, which could weigh on risk assets.

U.S. stocks slumped for a third day and bond yields rose after the report. As of press time, bitcoin (BTC) was down 1% since 0:00 coordinated universal time.

"The Fed is not going to panic after one startling CPI report, so you can expect to hear even more about transitory bottleneck inflation pressures over the next few weeks," wrote Ian Shepherdson, chief economist at Pantheon Macroeconomics, in an email. "But this report does mean that the first part of the higher inflation story - the reopening spike - is real." 

Robert Frick, corporate economist at Navy Federal Credit Union, wrote that, "In looking at the different categories, you can dismiss many price gains as temporary, which tilts the argument against persistently high inflation, but doesn't dismiss it entirely."