Bitcoin drops $4.3K as CPI data comes in hotter than expected

Inflation still high following hot CPI data

BTC price reacted to the February Consumer Price Index (CPI) data, which came in higher than expected at 0.4% in February, according to data from the U.S. Bureau of Labor Statistics (BLS). The year-on-year rate climbed to 3.2%, compared to estimates of 3.1% and January’s 3.1%.

Fed rate cuts in 2024?

Immediately after the release of the CPI data, market participants began debating the possibility of the Federal Reserve lowering interest rates in the coming months.

JPMorgan Chase CEO Jamie Dimon said he preferred the Fed delaying the decision to cut rates until later in the year.

“You can always cut it quickly and dramatically, … their (the Fed) credibility is a little bit at stake here; I would even wait past June and let it all sort it out.”

He warned that the rates may remain higher for some time, adding that any decision by the Fed should be based on data.

Kobeissi shared the following chart, saying the inflation of core services excluding shelter “jumped by 0.7% month-over-month, the biggest jump since September 2022.” In February, this metric “was up another 0.5% month-over-month after multiple increases in 2023.”

“The fight against inflation is far from over.”

Inflation data eclipsed by ETF inflows and upcoming halving

The price of the flagship cryptocurrency had recovered back above $71,000 at the time of writing, as the last week’s inflows into the spot Bitcoin ETFs totaled around “55.78K BTC ($3.68B) of inflows,” according to data from crypto intelligence firm Arkham.

“Blackrock with a solid $562 million, Fidelity with $215 million. I guess the biggest surprise is @vaneck_us with 118.8 million, almost doubling the amount they had gathered in the last 2 months in a single day,” read the post.

“$GBTC being a little bitch again with $494 million outflows. Thanks, Barry. They're now setting below 400k Bitcoin.”

BlackRock’s iShares Bitcoin Trust, IBIT, leads the pack holding Bitcoin worth $14.76 billion. Fidelity’s Wise Origin Bitcoin Fund, FBTC, comes in second with over $9.26 billion in BTC under management.

The ARK 21Shares Bitcoin ETF, ARKB, closes the top three funds, holding about $1.8 billion worth in its portfolio.

Meanwhile, outflows from Grayscale Bitcoin Trust, GBTC, totaled $11.04 billion over the past eight weeks. The fund recorded $494.1 million in outflows on March 11, its highest daily volume of capital withdrawals since Jan. 23.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.