Investing.com-- Bitcoin’s price fell on Thursday, losing more ground as risk appetite remained constrained after inflation came in stronger than expected in the U.S. in September.
The world’s biggest cryptocurrency was also pressured by speculation over the sale of a large number of tokens held by the U.S. government, although such a sale still appeared distant.
Broader crypto markets also declined on Thursday, largely lagging gains in other risk-driven markets, especially stocks.
Bitcoin fell 1.6% to $61,004.0 by 09:03 ET (13:03 GMT).
CPI data slightly hotter than anticipated
Bitcoin was pressured by some resilience in the dollar, amid growing uncertainty over the Federal Reserve’s plans to cut interest rates further.
The minutes of the Fed’s September meeting showed policymakers largely supported the central bank’s 50 basis point cut last month. But they were uncommitted to a pace of future rate cuts.
This came as strong payrolls data from last week saw traders wipe out bets on a 50 bps cut in November, with CME Fedwatch now showing traders betting on a 25 bps cut.
Meanwhile, inflation data for September in the U.S. came in hotter than anticipated, according to the latest Consumer Price Index (CPI) report released Thursday morning.
The CPI increased by 0.2% for the month, exceeding economist expectations of 0.1%, and matching the 0.2% rise seen in August. On a year-over-year basis, the CPI climbed 2.4%, slightly above the forecast of 2.3%, but down from 2.5% in August.
The Core CPI, which excludes the more volatile categories of food and energy, also rose by 0.3% in September, surpassing predictions of a 0.2% increase, and remaining consistent with August’s 0.3% rise. Year-over-year, core CPI was up 3.3%, compared to the expected 3.2% and 3.2% recorded in August.
The prospect of U.S. interest rates remaining high for longer bodes poorly for crypto, given that it points to lesser liquidity available for investing in speculative assets.
Today's inflation figures are expected to strengthen the view that the Federal Reserve may hold off on any rate cuts in November. However, weak employment data could counterbalance the disappointing CPI results.
Initial jobless claims, which had been steady at low levels for weeks, surged to 258,000 last week from 225,000, exceeding forecasts of 230,000. It remains uncertain how much of this increase was influenced by the aftermath of Hurricane Helene.
Bitcoin weighed by speculation over $4 bln govt sale
Some speculation over a mass token sale by the U.S. government- of tokens confiscated from the Silk Road marketplace- also weighed on Bitcoin.
The Supreme Court earlier this week upheld a court order for the government to liquidate 69,370 Bitcoin seized from the marketplace.
While such a liquidation does not appear imminent, the sale would see about $4 billion worth of Bitcoin being offloaded in the open market, which could batter prices.
Token distributions by defunct crypto exchange Mt Gox had battered Bitcoin prices earlier this year.
Crypto price today: altcoins fall tracking Bitcoin
Among broader cryptocurrency prices, world no.2 crypto Ether fell 1.9% to $2,385.02.
SOL, MATIC and ADA fell between 1% and 1.7%, while XRP climbed around 2%.
Among meme tokens, DOGE dropped 2.8%.
Ambar Warrick contributed to this report.