Bitcoin Briefly Drops Below $95,000 As Inflation Fears Reignite

Key Points

  • Bitcoin briefly fell below $95,000 following hotter-than-expected inflation data.
  • Higher rates make Treasuries more attractive than bitcoin.
  • Bitcoin moves with risk-on assets despite being touted as risk-off.
  • Inflows into spot bitcoin ETFs remain positive weekly.

Summary

Bitcoin experienced a brief dip below $95,000 following the release of hotter-than-expected inflation data, which diminished hopes for a Federal Reserve rate cut in March. This movement in bitcoin's price was mirrored by related stocks like MicroStrategy, Coinbase, and Marathon Holdings. The persistent high inflation and potential for further increases due to tariffs have made Treasuries more appealing to investors, overshadowing bitcoin's allure due to its risk and return profile. Despite reaching an all-time high above $109,000 in January, bitcoin's price has remained volatile, challenging the notion of it being a risk-off asset like gold. Interestingly, while bitcoin's price has been turbulent, spot bitcoin ETFs have seen positive inflows every week in 2025, although there have been outflows this week. This indicates a mixed investor sentiment towards bitcoin as an investment amidst economic uncertainties.

yahoo
February 13, 2025
Crypto
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