Bitcoin Drops 2% on Hotter-Than-Expected U.S. Inflation

Bitcoin (BTC) fell below $49,000 Tuesday after a hotter-than-anticipated U.S. inflation reading weighed on interest-rate cut expectations.

The largest crypto by market capitalization slipped about 2% to $48,700 from slightly above $50,000 earlier in the day, while the broad-market crypto index CoinDesk 20 (CD20) lost 2.4%.

The drop happened after the January Consumer Price Index (CPI) report showed 3.1% year-on-year inflation, faster than analysts’ 2.9% forecast. Market participants now see only a 34% chance of the Federal Reserve cutting interest rates in May, down from 52% a day ago, according to the CME FedWatch tool.

The lower chance of an imminent rate cut weighed on traditional markets as well. The 10-year U.S. Treasury bond yield advanced 12 basis points, while the S&P 500 equity gauge and the tech-heavy Nasdaq Composite Index declined as much as 2%.

Edited by Sheldon Reback.

Read Previous

Ethereum ETF: Franklin Templeton Enters The Fray As ETH Rallies

Read Next

Bitcoin rally leads Grayscale’s parent company DCG to profitability

Leave a Reply

Your email address will not be published. Required fields are marked *

Most Popular