Bitcoin back below $50k while stocks struggle on poor inflation print 

January’s consumer price index, which broadly measures goods and services across the country, rose 0.3% from December

article-image

isak55/Shutterstock modified by Blockworks

share

Stocks slipped while cryptocurrencies were mixed Tuesday morning after the latest consumer price data showed inflation is more persistent than economists had bargained for. 

January’s consumer price index, which broadly measures goods and services across the country, rose 0.3% from December. Prices are up 3.1% year-over-year, according to data from the US Bureau of Labor Statistics. Analysts had called for a 0.2% gain over the month and a 2.9% annual increase. 

The S&P 500 and Nasdaq Composite indexes had a rocky start Tuesday morning shortly after the open, losing 1.4% and 1.7%, respectively. 

Bitcoin (BTC) lost around 0.4% Tuesday morning in New York after briefly breaking through $50,000. Ether (ETH) on the other hand was up around 4% at time of publication. Analysts say bitcoin’s surge past a key psychological level could be a sign recent headwinds are beginning to let up. 

Read more: Bitcoin crosses $50k as market momentum grows

“The post-ETF sell-off in bitcoin didn’t last very long and a break above $50,000 will be widely viewed as a significant milestone in its comeback,” Craig Erlam, senior market analyst at OANDA, said. “Many will now be hoping it goes from strength to strength, perhaps buoyed by the halving event in April.”

The latest inflation print could spell trouble for investors banking on an interest rate cut from the Federal Reserve in the coming months. Fed Funds futures put the likelihood of a March rate decrease at just 9%, and odds of a cut coming in May currently sit at 37%, according to data from CME Group. 

The Federal Reserve Bank of New York on Monday kept its predictions for one year and five year inflation the same, according to its January Survey of Consumer Expectations (SCE). Central bankers say one-year prices will remain elevated more than desired, at around 3%. 

“Fed Chair Powell often refers to survey-based readings of expected future inflation, and the SCE is one of the most closely watched reports tracking these expectations,” Nicholas Colas, co-founder of DataTrek Research, said. 

“Medium-term inflation expectations are back to pre-pandemic levels (2.5%), but 1-year expectations are not (3%). This is one more reason the Fed needs to see more evidence of lower inflation before cutting rates; it wants consumers to be confident that price increases are waning,” Colas added. 


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Permissionless is a conference for founders, application developers, and users. Come meet the next generation of people building and using crypto.

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

4.png

Research

This months PPGC covered four main areas. Firstly, debriefing the progress and status of the mainnet implementation of the Ahmedabad hard fork. Secondly, a retrospective on the testnet phase of the Ahemdabad Hard Fork. Thirdly, an update on PIP-36 which involves replaying failed state syncs. Lastly, PIP-47 which pushes upgrades to the Polygon Protocol Council.

article-image

Institutions to test out the settlement of “digital assets and currencies” on a network that annually carries more than 5 billion financial messages

article-image

After Bitwise’s XRP ETF filing this week, one industry watcher notes: “Politics will determine whether this happens soon or in a few years”

article-image

Plus, a look back at some of the SEC’s biggest enforcement moves under Gurbir Grewal

article-image

The forward-looking financial system is being championed by several contributors to India’s UPI digital money system

article-image

Multiple teams are pursuing integration cross-chain and off-chain

article-image

An SEC spokesperson told Blockworks the Ripple judgment clashes with Supreme Court precedent and securities laws