Bitcoin Falls Below $93,000 as Inflation Jitters Rattle Crypto Prices
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The price of Bitcoin briefly dipped below $93,000 earlier Wednesday, per data from CoinGecko, facing pressure after a series of macroeconomic data points sparked inflation jitters among investors. Jake Ostrovskis, an OTC trader at Wintermute, told Decrypt that crypto prices have been tightly correlated with traditional assets since the Fed’s December FOMC meeting, in which policymakers signaled a more cautious approach to easing financial conditions in 2025. Traditional assets have been pricing out Fed rate cuts amid signs that the U.S. economy remains strong, and that’s had a pronounced effect on the crypto market as inflows spurred on by a wave of post-election hype cool down, he said. The Institute for Supply Management, for example, released its Purchasing Manager’s Index for the services sector Tuesday. The gauge used to measure industry-specific economic activity came in higher than expected, according to Trading Economics. “Two months ago, no one would even look at this,” Ostrovskis said. “But because the Fed has put [the] onus on inflation data now, investors and traders are looking at every single bit.” Data released by the U.S. Bureau of Labor Statistics meanwhile showed the economy remained on “very strong footing” in November, Pantera Capital General Partner Cosmo Jiang told Decrypt. The report showed an unexpected increase in job openings, and “all markets, from equities to rates to crypto, started to price in a ‘higher for longer scenario,’” he added. The Fed lowered its benchmark interest rate by 1% last year, cutting interest rates in September for the first time in four years. While lower interest rates tend to support risk assets, they can also stimulate inflation through increased spending and easier borrowing. Following Wednesday’s dip, the price of Bitcoin has since rebounded to $94,600, showing a 2.2% drop over the past day. Meanwhile, the price of Ethereum…
Filed under: News - @ January 10, 2025 4:25 pm