Other cryptocurrencies have also taken a hit: Ethereum, for example, is down 3.1% in the past 24 hours and is now trading at $1,593. Dogecoin is down 3.3% in 24 hours and is currently priced at $0.082.
Why Are Crypto Prices Falling Today?
The reason for today’s price drop is the inflation data from America that came in today. This data indicates that the US Federal Reserve may implement more interest rate hikes in the future.
CoinShares’ James Butterfill says the recent decline is a direct result of US macroeconomic data. Investors expect the Federal Reserve to continue aggressively raising interest rates.
The report, published on Friday, showed an increase in inflation in the world’s largest economy. The personal consumer spending index rose 5.4% from last year and the core measure rose 4.7%.
Not only crypto investors, but also equity investors reacted by selling. For example, the Dow Jones Industrial Average was down 1.2%, the S&P 500 was down 1.6% and the Nasdaq Composite was down 2%. The AEX also turns red today and loses 1.23% of its value.
Bitcoin thus follows the trend of other volatile assets such as technology stocks when there are signs that the Fed will continue to be aggressive in its monetary policy.