BTC BELOW 23K? 😨
Crypto is following the U.S. equities market today as it typically does.
Investors shifted “risk-on” assets after key inflation data came in on Friday and showed that more interest rate hikes by the FED could be coming.
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Crypto is following the U.S. equities market today as it typically does.
Investors shifted “risk-on” assets after key inflation data came in on Friday and showed that more interest rate hikes by the FED could be coming.
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Friday’s report showed that inflation in the world’s biggest economy increased: the personal consumption expenditures price index rose 5.4% from last year and the core metric was up 4.7%.
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CoinShares Head of Research James Butterfill said that the sudden dip in crypto prices was the “direct result of macro data from the U.S.,” adding that “investors expect a more hawkish Fed.
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Equities investors reacted by selling: the Dow Jones Industrial Average fell by 390 points, or 1.2%, while the S&P 500 dipped 1.6% and Nasdaq Composite by 2%.
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Bitcoin is doing nothing new: the volatile asset has followed other volatile assets like tech stocks whenever there are signs the Fed might remain hawkish with its aggressive monetary policy.
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The Fed started raising interest rates last year in an urgent attempt to tame 40-year high inflation in the U.S. It hiked rates by 75 basis points four times, and then slowed down by upping them by 50 basis points.
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Most recently, the central bank has slowed down to 25 basis points—but Fed Chairman Jerome Powell has repeatedly said that the road ahead to get inflation down will be bumpy.
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Do you believe inflation will rise in the next months, and what impact will this have on the crypto industry?
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