Bitcoin and other digital assets fell on Friday following the release of key inflation data that spooked investors. According to CoinGecko, the leading cryptocurrency is down 3% in just 24 hours and is currently trading at $23,070. This comes after bitcoin broke above $25,000 per coin for the first time in eight months last week. Other major cryptocurrencies also saw significant declines, with Ethereum trading down 3.1% to $1,593 over the past day, and Dogecoin down 3.3% to $0.082.
The decline in the crypto market is in line with the US equity market, which experienced a shift in “risk-on” assets such as stocks and digital assets following the release of inflation data on Friday. Investors are now worried that the US Federal Reserve may hike interest rates further in the near future, prompting them to sell their assets.
According to Friday’s report, inflation is continuously increasing in the world’s largest economy. The personal consumption expenditure price index increased by 5.4% over the previous year, while the core metric increased by 4.7%. As a result, equity investors reacted by selling, with the Dow Jones Industrial Average down 390 points (1.2%), the S&P 500 down 1.6% and the Nasdaq Composite down 2%.
In contrast, the price of bitcoin remained largely unaffected by the news. This is in line with the cryptocurrency’s tendency to follow other volatile assets, such as tech stocks, when there are signs that the Federal Reserve may maintain its dovish stance on monetary policy.
The Federal Reserve began raising interest rates last year in response to US 40-year high inflation rates. The central bank raised rates four times by 75 basis points before slowing and raising them by 50 basis points.
Here are the top cryptocurrencies trading on February 25, 2023 at 9:00 AM IST:
Bitcoin: $23,416.82 USD
-3.56%
Ethereum: $1,618.66
-3.04%
Tether: $1.02 USD
+0.00%
USD Coin: $1.00
+0.25%
BNB: $305.85 USD
-2.95%
XRP: $0.382 USD
-3.31%
Dogecoin: $0.0827
-3.65%
Cardano: $0.3714
-4.61%
Polygon: $1.28 USD
-6.48%
Polkadot: $6.71 USD
-6.39%
Tron: $0.06825 USD
-2.32%
Litecoin: $92.71
-3.26%
Shibu Inu: $0.00001279
-4.36%