Bitcoin’s value saw a notable drop following the release of inflation data, underscoring its susceptibility to broader economic indicators.
The latest Consumer Price Index (CPI) report, unveiled on Wednesday morning, revealed a 0.4% increase in US consumer prices from the previous month and a 3.5% surge over the past year in March. These figures surpassed economists’ projections, which had forecasted a 0.3% monthly uptick and a 3.4% annual climb.
This unexpected uptick in inflation complicates the Federal Reserve’s approach to interest rates. Striving to rein in inflation and bring it back to its 2% target, the central bank now faces a murkier path forward.
Initially projecting six rate cuts for the year, investors now anticipate around three 25-basis-point cuts, reflecting the Fed’s struggle to navigate mounting inflationary pressures.
Bitcoin Faces Pressure
In response to the inflation data, the price of bitcoin (BTC) dropped by over 2% to $67,500 within an hour. Bitcoin’s downturn underscores the challenges it faces amidst growing concerns over inflation.
Conventional markets also reacted unfavorably to the inflation figures, with S&P 500 and Nasdaq 100 futures declining by approximately 1.5%. Moreover, the 10-year U.S. Treasury yield surged by 13 basis points to 4.50%, while the dollar index saw a notable 0.5% increase. Even gold, which had been reaching historic highs, saw a 0.5% dip to $2,352 per ounce.
Disclaimer: Remember that nothing in this article and everything under the responsibility of Web30 News should be interpreted as financial advice. The information provided is for entertainment and educational purposes only. Investing in cryptocurrency involves inherent risks and potential investors should be aware that capital is at risk and returns are never guaranteed. It is imperative that you conduct thorough research and consult with a qualified financial advisor before making any investment decision.
