Hotter-than-expected U.S. inflation data rattled risk assets on Wednesday, and crypto was among the first markets to feel it. The Consumer Price Index (CPI), a government gauge of what Americ
Hotter-than-expected U.S. inflation data rattled risk assets on Wednesday, and crypto was among the first markets to feel it.
The Consumer Price Index (CPI), a government gauge of what Americans pay for everyday goods and services, rose 0.6% in September, according to the Bureau of Labor Statistics. That matched forecasts.
But annual inflation climbed to 3.7% from 3.4% in August, above the 3.6% economists expected.
Core CPI strips out volatile food and energy prices. It rose 0.3% on the month, against a 0.2% forecast. On an annual basis, it reached 2.6%, up from 2.4% in August.
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The data complicates the Federal Reserve’s path. Before the release, Fed officials had signaled at least one more 25-basis-point hike before year-end, though forecasters were split on whether it would land in October or December.
The hot print could put an October hike back on the table.
Higher rates tend to weigh on speculative assets like crypto because safer investments such as bonds start paying more.
Bitcoin was trading around $83,800 before the data release. It dropped sharply below $82,000-mark, currently trading at $81,728 at the time of writing.
Bitcoin price movement. Source: Decibel
Bitcoin has been trading below the $86,000 mark. It last crossed that level on September 21, reaching an eight-month high.
Ether, the native token of the Ethereum blockchain, fell as low as $2,455 and is now trading around $2,470.
XRP, a cryptocurrency used by payments firm Ripple to speed up cross-border transfers, dropped to $1.3488 from $1.3779 before recovering to $1.3592.
The selling spread beyond digital tokens. Stock futures pointed lower after the data. Nasdaq 100 futures fell 0.65%, and S&P 500 futures were down 0.3%. Even gold lost ground, dropping 1.5% to $4,116 an ounce.
Circle stock was trading at $80.89 at press time. Source: Yahoo FinanceCrypto-linked stocks took some of the sharper hits. Their fortunes often move with digital asset prices and trading activity, so they tend to swing when crypto does.
Shares of Robinhood Markets (HOOD), the retail trading app where users buy stocks and crypto, are down 3.27% at $106.90.
Strategy Inc. (MSTR), a company that holds Bitcoin on its balance sheet, is down 2.60% at $148.23. Investors often treat its stock as an indirect bet on the cryptocurrency’s price.
Circle Internet Group (CRCL) fell the most of the three, down 4.02% at around $80.89. Circle issues USDC, a stablecoin. Stablecoins are digital tokens designed to hold a steady value, usually pegged to the U.S. dollar.
