Bitcoin Slips as Inflation Data Dampens Rate Cut Hopes
Bitcoin took a breather from its multi-day rally as hotter-than-expected U.S. consumer price inflation drove market participants to push out their expectations for interest-rate cuts later in the year. With stubborn inflation indicating the Federal Reserve will be in no rush to start rate reductions, the first-ever cryptocurrency dipped 1.8% to $48.7K at 11:02 a.m. ET.
Prior to the U.S. Bureau of Labor Statistics releasing its January CPI report, bitcoin actually topped $50K for the first time in more than two years, as recently-approved spot bitcoin exchange-traded funds continued to see strong inflows. Still, the coin failed to fully break out of the psychological threshold.
The lower odds of an imminent Fed rate cut also weighed on traditional markets, with all three major U.S. stock market indices down at least 1% at the time of writing. Crypto-exposed stocks changed hands in negative territory as well. Michael Saylor’s MicroStrategy retreated 4%, crypto exchange Coinbase Global fell 5%, and bitcoin miners Riot Platforms -5% and Marathon Digital -7.8% slid.
Analyst comment
Negative news: Bitcoin Slips as Inflation Data Dampens Rate Cut Hopes.
As an analyst, the market is likely to react negatively to this news as it suggests that the Federal Reserve may delay rate cuts due to higher inflation. Bitcoin and crypto-exposed stocks may experience a decline in value as a result.
