Bitcoin fell after news that inflation was higher than expected in February.
According to CoinGecko, the price of the largest digital asset by market capitalization has fallen by almost 3% in 24 hours. The price is $70,920 per coin. Overnight, Bitcoin hit a new all-time high of just over $73,700.
Data from the Labor Department's Bureau of Labor Statistics showed Thursday that the producer price index rose 0.6% last month. An increase of just 0.3% was expected, meaning inflation is not going away yet.
The index measures the change in prices after a manufacturer leaves and is an important indicator of inflation.
Shares initially barely moved but have since fallen. The S&P 500 fell 0.2%, while the tech-heavy Nasdaq fell nearly 0.2%. The Dow Jones Industrial Average also fell about 0.3%. US stocks – especially technology stocks – are “risky assets” and tend to fall on hot cryptocurrency inflation data.
Investors are hoping the Federal Reserve will cut interest rates by May, but the central bank could leave them there if inflation doesn't fall in the world's largest economy.
Experts have told Decrypt that if interest rates actually fall, the price of Bitcoin would continue to rise.
Bitcoin and the overall crypto market have surged after spot Bitcoin exchange-traded funds (ETFs) were approved in January, allowing investors to gain exposure to the cryptocurrency without having to actually hold and store it.
The funds recorded huge inflows and daily trading volumes. Net inflows across the 10 ETFs surpassed $1 billion this week, and the funds now manage over $60 billion in assets.
Edited by Andrew Hayward
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment or other advice.
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