Bitcoin, the most well-known digital currency that is known for being strong, took a sudden turn when investors around the world became worried about inflation.
Both regular markets and cryptocurrency markets went down because of this. Bitcoin’s price dropped below $67,000 again. This was the most significant drop in over a week.
Cryptocurrency prices dropped quickly, affecting the whole market. In just 24 hours, stocks with a lot of debt worth almost $900 million were wiped out. A lot of people lost a lot of funds on Bitcoin and Ether. In less than a day, Ether lost a scary 8% of its value.
Bitcoin Dips on Inflation Fears, Stocks Follow Suit
Something that the blockchain data company Santiment found led to the drop. The Consumer Price Index (CPI) shows that they are worried about inflation. They are staying away from dangerous investments like cryptocurrencies because of this.
It’s interesting that stock markets have also been going down lately. Things are getting scary for both crypto and standard finance, as shown by the 1.5% drop in the S&P 500 index and the 3.4% drop in the price of gold.
These sell-offs happened at the same time because of how the Federal Reserve handled interest rates. However, the Federal Reserve does not wish to loosen monetary policy at this time because inflation is very high. In other words, interest rates stay higher than planned. Since this is how policymakers feel, rate cuts are less likely to happen in 2024. This makes investors even more worried.
In these rough times, Bitcoin and gold are often seen as safe investments that will protect you from inflation and economic instability. But the thought of higher interest rates has made investors rethink how much risk they are willing to take, which has caused a broad sell-off across all asset classes.
