Bitcoin, Ethereum, Polkadot Experience Volatility as US CPI Exceeds Expectations

Investing.com – Recent inflation data from the U.S. reveals that inflation did not decrease as much as anticipated in September, disappointing market bulls.

The newly released report indicated that overall inflation for the year was at 2.4%, a minor reduction from the previous figure of 2.5%, but still above the 2.3% economists had predicted. Additionally, the core inflation rate, which excludes more unstable food and energy prices, increased to 3.3%.

Following a peak of $61,246 during the European session, Bitcoin experienced a decline of approximately 0.2%. The asset’s price dropped as much as 2.4%, and other cryptocurrencies also fell, with notable losses including a 1.1% decrease for another major coin.

These unexpectedly high inflation figures have spurred speculation that the Federal Reserve may pause any plans for rate cuts, leading to a stronger dollar and increased aversion to risk in volatile markets like cryptocurrencies.

According to the CME’s FedWatch tool, there is now an 85% likelihood that the Federal Reserve will implement a 25 basis point rate cut at its meeting on November 7, an increase from the 65% prediction just a week ago. Previously, there was a 35% chance of an additional 50 basis point cut before the end of the year, following an initial reduction in September.

Bitcoin prices have recently been particularly reactive to U.S. economic data, as investors tend to favor stability over riskier investments.

In the Bitcoin ETF market, it was a relatively uneventful day despite over $30.5 million in outflows on Wednesday. Out of 11 funds, nine showed no movement in either direction. Conversely, a day earlier, U.S.-listed Bitcoin ETFs experienced their highest inflows since September 27, totaling a net addition of $235.2 million. The Fidelity Wise Origin Bitcoin Fund led this increase, attracting $103.7 million, followed closely by BlackRock’s iShares Bitcoin Trust with $97.9 million.

Since January, Bitcoin ETFs have garnered nearly $19 billion in net inflows. However, Ether ETFs exhibited no activity yesterday, marking the second instance this week and the third overall since their launch, leaving them with $562 million in net outflows since debuting in July.

Looking ahead, further U.S. economic data is scheduled for release on Thursday, including reports on weekly jobless claims, real earnings, monthly retail chain store sales, and the Treasury budget statement for the month.