The price of Bitcoin dropped once more after reaching over $72,000 on April 8th. Some reasons for this decrease are currently being discussed, casting a pessimistic shadow over the leading cryptocurrency.
Inflation Data Expected To Come In Hot
On April 10, the Consumer Price Index (CPI) report for March is due out. Some analysts believe this data will reveal an increase in general inflation. Such a finding could influence the Federal Reserve to adopt a more aggressive stance on interest rates. In turn, this might adversely affect Bitcoin‘s value and the entire crypto market.
The reason Bitcoin’s price has dropped recently is that crypto investors are hesitant to enter the market before the release of the Consumer Price Index (CPI) report. However, if the CPI figures show a favorable result, this could boost investor confidence in the economy and create a positive outlook for the crypto market, potentially leading to price increases.
Additionally, it’s worth noting that the inflation figures for January and February came in higher than anticipated. This raises questions about what the implications could be if the recent trend of exceeding expectations continues in the coming months. So far, the Federal Reserve has kept interest rates unchanged at around 5.3%. At the start of the year, there was some hope that rate cuts might be on the horizon at some point in 2023.
Despite inflation persistently exceeding the Central Bank’s desired 2% threshold, there is mounting concern that they may eventually resort to extreme actions. This development could negatively impact Bitcoin’s value, as numerous crypto experts have made optimistic forecasts under the belief that multiple rate reductions would occur this year.
Spot Bitcoin ETFs Are Back In The Red
The withdrawal of funds from Spot Bitcoin ETFs like the Grayscale Bitcoin Trust (GBTC) on April 8 and 9 has played a role in Bitcoin’s recent price drop. These investment vehicles saw a total net outflow during that period, resulting in a substantial sell-off of Bitcoin in the market. Particularly, GBTC recorded outflows amounting to $303.3 million and $154.9 million on those two days.
During this time, the other Bitcoin ETFs, apart from those mentioned, haven’t seen significant investment. The lack of inflows suggests a decrease in demand for these specific ETFs. For instance, six out of ten Bitcoin ETFs (excluding GBTC) had no inflows on April 9, and five out of ten did not record any inflows on April 8. BlackRock’s iShares Bitcoin Trust (IBIT) also experienced a comparatively low inflow of $21.3 million on those days.
Currently, Bitcoin is priced approximately $69,300 on the market, representing a 2% decrease in value over the past day based on information provided by CoinMarketCap.
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2024-04-10 15:40