Bitcoin Falls Amid US Un-expected Inflation Surge

CS Web Team
By CS Web Team 2 Min Read

Cryptocurrency prices decline as US inflation spikes, impacting Bitcoin and Ethereum. Analysts speculate on future stability.

Tuesday’s dramatic decline in cryptocurrency prices was caused by a wider sell-off in financial markets due to unexpected US inflation data. After surpassing the $50,000 milestone the day before, Bitcoin dropped 3% to $48,385.

As US inflation surprised everyone by turning higher than expected, the leading cryptocurrency got swept up in a rush to sell risky assets.

The Consumer Price Index increased by 0.5% in January compared to December of last year, according to official figures, above analyst projections. The likelihood that the Federal Reserve will be able to carry out the anticipated rate decreases this year is cast in doubt by the ongoing inflationary pressures.

Because of this, Charlie Bilello of Creative Planning says that the likelihood of a March rate cut has decreased from 77% a month ago to just 9% at this time. Investments in speculative assets decreased as a result of the increase in Treasury yields.

After touching one-month highs just now, ether fell. MicroStrategy and Coinbase, two companies susceptible to cryptocurrencies, saw 4-5% declines. Following a 4-5% decline earlier, losses on bitcoin mining equities were reduced.Price reactions to changes in monetary policy, such as higher interest rates and longer benchmark yields, are demonstrated by the decline in cryptocurrency.

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