Bitcoin falls to $63K as rate cut expectations fade after disappointing U.S. inflation data

On Thursday, Bitcoin (BTC) briefly fell below the $63,000 mark as the cryptocurrency market experienced a downturn in response to recent data indicating higher inflation and decreased growth in the U.S. during the first quarter.

The initial report from the U.S. government on first-quarter GDP indicated a growth rate of only 1.6%, significantly below the 2.5% projected by analysts and a decrease from the 3.4% recorded in the fourth quarter of 2023. Additionally, the GDP price index exceeded expectations slightly, reaching 3.1%, up from 1.6% in the preceding quarter.

Investors were unsettled by the discouraging inflation report, which further dampened prospects for interest rate cuts this year, causing a ripple effect across all market risk assets. The S&P 500 and Nasdaq, prominent U.S. stock indexes, opened the trading session with nearly a 2% decline, while the 10-year U.S. Treasury bond yield surged by 8 basis points to reach 4.73%, marking its highest level since November.

BTC experienced a drop of more than 4%, reaching a low of $62,800 before bouncing back to $63,700 recently. Similarly, Ether (ETH) saw a 4% decline during the same timeframe, trading at approximately $3,100.

Major altcoins suffered even larger losses, with native tokens of layer-1 networks such as Solana (SOL), Avalanche (AVAX), and Aptos (APT) falling by 8% to 9% before partially recovering. The CoinDesk 20 Index (CD20), representing the broader market, decreased by 6%.

Commenting on the situation, Mike Cornacchioli, senior vice president for investment strategy at Citizens Private Wealth, remarked in an email to CoinDesk, “The Fed finds itself in a tight spot following today’s GDP report, which was worse than expected. This data pushes back expectations for rate cuts, leaving investors to question whether the Fed will be able to implement any rate cuts in 2024. This uncertainty has implications across financial markets.”

Read More: US alleges Crypto-Mixing founders ran a criminal haven

Disclaimer:
This content is AI-generated using IFTTT AI Content Creator. While we strive for accuracy, it’s a tool for rapid updates. We’re committed to filtering information, not reproducing or endorsing misinformation. – Jomotoday for more information visit privacy policy