Bitcoin Holds Steady as Market Awaits Pivotal Inflation Data

Bitcoin’s price barely moved Wednesday as traders awaited important inflation data due to be released Thursday. 

The biggest cryptocurrency by market cap was trading for $19,142 at the time of writing—a minimal 24-hour increase of 0.7%.  

Tomorrow, the U.S. Bureau of Labor Statistics will release the consumer price index (CPI), a report that measures price changes in a basket of common consumer goods and services. The index is used to estimate changes in the economy’s inflation rate.

Depending on the outlook, the CPI report could signal that the Federal Reserve will continue to aggressively hike up interest rates in an attempt to cool the economy and curb rising inflation.

JPMorgan said today that such a move could mean the stock market could continue to suffer—as it typically has done when the central bank has increased the cost of borrowing. 

And when U.S. equities take a hit, so, typically, does BitcoinBitcoin (and the rest of the crypto market). 

But despite the Dow Jones Industrial Average dropping 0.10%, or 28.34 points, to finish at 29,210.85, and the S&P 500 closing 11.81 points—0.3%—to 3,577.03, the cryptocurrency market seemed more stable. 

Bitcoin Dips as Fed Again Raises Interest Rates to Combat Inflation

The price of Bitcoin dropped sharply following the Federal Reserve’s announcement that it would hike interest rates by 75 basis points to combat sky-high inflation.  The biggest cryptocurrency by market cap dropped below $19,000 following the announcement before rebounding amid widespread market volatility. It’s now trading at roughly $19,039, down around 1% over the last hour. Bitcoin is also down approximately 5.7% in the past seven days.  Market analysts had expected the Fed to raise interest...

Ethereum, the second largest digital asset, was up even more than Bitcoin, trading at $1,300, a 1.4% increase in the past day. 

In fact, seven out of the ten biggest cryptocurrencies by market cap had all made gains at the time of writing. 

Bitcoin and the wider crypto market has closely been related to the stock market this year. But in the past month, that correlation has weakened—albeit slightly—according to some experts who spoke to Decrypt. 

Regardless of whether Bitcoin does decouple from the stock market, it is likely to be a volatile trading day as investors attempt to guess which way the winds will blow.