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Bitcoin (BTC) has fallen beneath the $50K mark, alongside stock prices, following the release of the US Consumer Price Inflation data for January, which exceeded expectations.
The price of Bitcoin dipped to as low as $48,400 in the last 24 hours, as reported by Coinstats, before experiencing a slight rebound and currently trading at $49,571 – indicating a potential recovery for Bitcoin.
Data from the U.S. Labor Department revealed that inflation was higher than anticipated last month, increasing by 3.1% for the year ending in January.
See Also: Should You Buy Bitcoin (BTC) While It’s Price Is Rising?
Consequently, risk assets such as U.S. equities experienced declines as investors considered the possibility that the Federal Reserve may delay interest rate cuts in the upcoming months.
The S&P 500 and Nasdaq 100 indices both fell by 1% following the data release on Tuesday morning.
Elevated interest rates have caused investors to avoid assets like cryptocurrencies and technology stocks. However, the Federal Reserve has indicated that it will reduce rates this year, which has led to a rally in the stock market and an increase in the prices of digital assets.
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Yesterday, Bitcoin (BTC) surpassed the $50,000 level for the first time since December 2021, reaching a high of $50,256 before declining again.
The upward movement is attributed to significant investors rapidly allocating funds into the newly approved BTC exchange-traded funds (ETFs).
The Securities and Exchange Commission approved 10 spot BTC ETFs in January after a decade of rejections.
These investment vehicles, which are traded on stock exchanges, enable traditional investors to gain exposure to cryptocurrency.
See Also: Spot Bitcoin ETFs Reach $10B in AUM One Month After Approval
Despite the 24-hour decline in BTC, it remains up by nearly 14% over the past week.
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