Bitcoin has dropped with stocks on news that the U.S. Consumer Price Inflation report for January was hotter than expected.
The Bitcoin price is down 2% in the past 24 hours, according to CoinGecko, and currently trading for $48,747.
A report from the U.S. Labor Department showed that inflation was higher than expected last month, having risen 3.1% for the 12 months ending January. As a result, risk assets like U.S. equities dropped as investors pondered that the Federal Reserve might put off slashing interest rates in the coming months.
The S&P 500 and Nasdaq 100 indices were both lagging by 1% after the report dropped on Tuesday morning.
High interest rates have led investors to stay clear of assets like cryptocurrencies and tech stocks. But the Federal Reserve has said that it will cut rates this year, leading to a stock market rally and the rising price of digital assets.
Yesterday, Bitcoin (BTC) crossed the $50,000 threshold for the first time since December 2021. It touched a peak of $50,256 before dropping down again.
The reason for the upwards push is that big investors are fast putting their cash into the newly approved BTC exchange-traded funds (ETFs).
The Securities and Exchange Commission in January approved 10 spot BTC ETFs after a decade of denials.
Such investment vehicles, which trade on stock exchanges, allow traditional investors to get exposure to cryptocurrency.
Despite BTC’s 24-hour drop, it is still up by nearly 14% in the past seven days.
Edited by Stacy Elliott.