Bitcoin and the broader financial markets faced a downturn as the United States’ Gross Domestic Product (GDP) revealed sluggish growth in the first quarter of 2024, casting a shadow on investor confidence. With the first quarter GDP figures falling short of expectations at a 1.6% annualized pace, concerns about inflationary pressures loom large, amplifying market volatility.

US GDP Grows 1.6% In Q1

The latest data from the Bureau of Economic Analysis paints a somber picture of the US economy, with first-quarter U.S. GDP growth clocking in at a modest 1.6%, well below the anticipated 2.5%. A commentary by The Kobeissi Letter underscored the severity of the situation, highlighting a worrying juxtaposition of weakening economic growth and surging inflation. 

Meanwhile, the Core PCE Price Index witnessed a substantial jump from 2.0% to 3.7%, far surpassing estimates, while the PCE inflation data surged from 1.8% to 3.4%, stoking fears of an impending hawkish stance from the Federal Reserve.

Amid that, investor sentiment took a hit as concerns over escalating inflation and lackluster economic performance weighed heavily on cryptocurrency prices. Despite ongoing market sell-offs preceding the GDP release, the dismal data exacerbated the downward trajectory. 

In addition, with expectations of a delayed rate cut by the Fed, recent gains in Bitcoin and other cryptocurrencies were swiftly wiped out, signaling a challenging road ahead for digital asset markets.

Also Read: Bitcoin Bulls Scale Back Leveraged Bets, Post-Halving Demand Cools

What’s Next?

Following the gloomy GDP data, the U.S. 10-year Bond Yield rose 1.89% to $4.743, while the U.S. Dollar Index Futures noted a surge of 0.10% to $105.795. Meanwhile, the gloomy data along with the hotter-than-anticipated inflation data for the first quarter suggests a further delay in the Fed’s rate cut decision.

The Federal Reserve has maintained a hawkish stance lately while hinting at a potential delay in their rate cut plans. Amid this, the recent data has further dampened the investors’ sentiment, as the inflation still remained higher despite the higher policy rates.

Meanwhile, following the GDP data, the Bitcoin price fell 4.53% to $63,091.65, with its trading volume soaring 43.75% to $34.67 billion. Amid the recent selloff, market experts have warned of a further slump in the BTC price.

Notably, the dip in the BTC price also triggered a broader crypto market crash. As of writing, the global crypto market cap fell 4.85% to $2.33 trillion.

Also Read: How Is Bitcoin Halving Adjusting The Market?

The post Bitcoin Breaks Lower As US GDP Slows To 1.6%, Hints At Hot PCE Inflation appeared first on CoinGape.

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Filed under: News - @ January 1, 1970 12:00 am