Bitcoin drops $4.3K as CPI data comes in better than expected
Bitcoin (BTC) fell 2.3% after Wall Street opened on March 12, as markets reacted to higher inflation in the United States and implications for a 2024 interest rate cut.
Inflation remains high following fresh CPI data.
According to data from Cointelegraph Markets Pro and TradingView, BTC fell to $68,636 on Bitstamp after hitting a high of $73,054 on March 12.
According to data from the US Bureau of Labor Statistics (BLS), the price of BTC responded to the February Consumer Price Index (CPI) data. The year-over-year rate rose to 3.2%, compared with 3.1% and the 3.1% estimate in January.
According to the BLS official statement, increases in shelter and fuel costs contributed more than 60% of the monthly increase in the CPI index for all goods.
Will Fed Rate Cut in 2024?
Immediately after the release of CPI data, market participants began to discuss the possibility of the Federal Reserve reducing interest rates in the coming months.
According to CME's FedWatch tool, traders are betting on a March rate cut of just 1% at the time of writing and 15% on February 12. That means market participants are betting the U.S. central bank will hold rates steady. March and May may be cut in June.
JPMorgan Chase CEO Jamie Dimon said the Fed would prefer to delay a decision to cut rates until the end of the year.
Speaking at the Australian Financial Review Business Summit in Sydney, Dimon said;
“You can always cut quickly and dramatically, … their[the Fed's]credibility is a bit at stake here. I would wait even past June and let him sort it all out.
He warned that the price may rise for some time, any decision of the Fed should be based on information.
“Is inflation gone?” Marketing Resource wrote part of Kobayashi's letter in a March 12 post on X's social media platform.
Related: Bitcoin Has 6 Months Until ETF ‘Liquidity Crisis' – New Analysis
Kobeisi shared the following chart, noting that core services inflation, excluding shelter, “jumped 0.7% month-on-month, the biggest jump since September 2022.” In February, this measure “increased 0.5% monthly after several increases through 2023.”
“The fight against inflation is not over yet.”
Inflation data has been overshadowed by ETF earnings and the upcoming half decline
Bitcoin exchange-traded funds (ETFs) that have entered the space, on the other hand, are helping to reduce the cost of sales based on inflation.
The Bitcoin ETF, which entered the space last week, has seen a total of “55.78K BTC ($3.68B) inflows,” writing that the price of the main cryptocurrency has rebounded to more than $71,000.
Sharing data from Farside Investors on X, market analysts acknowledged the positive trends of increasing ETF flows on March 11 with “half a billion net inflows.”
“Blackrock with a strong $562 million, Fidelity with $215 million. I guess the most impressive @vaneck_us is 118.8 million, which is almost double the amount they collected in one day in the last 2 months,” the post read.
“$GBTC is a bit of a bitch again with a $494 million spend. Thanks Barry. Now they are making less than 400k bitcoins.
BlackRock's iShares Bitcoin Trust, IBIT, leads the pack with $14.76 billion worth of Bitcoin. Fidelity's Wise Origin Bitcoin Fund, FBTC, is second with more than $9.26 billion in BTC under management.
The ARK 21Shares Bitcoin ETF, ARKB, closes out the top three funds, holding nearly $1.8 billion in its portfolio.
Meanwhile, outflows from Greyscale Bitcoin Trust, GBTC, have reached $11.04 billion over the past eight weeks. The fund recorded $494.1 million in outflows on March 11, the largest daily capital outflow since January 23.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
