Bitcoin Spot ETFs See $250M Outflow as US Inflation Surges, Bitcoin Corrects
Bitcoin spot ETFs saw a significant outflow of around 250 million US dollars in the US over Monday and Tuesday. Meanwhile, US inflation rates have been rising, with consumer prices increasing by 0.4 percent in April, surpassing expectations. This has led to a correction in Bitcoin's price, which fell below its previous all-time high of 69,000 US dollars. Federal Reserve Chair Jerome Powell hinted at a potential rate cut in the future, while JPMorgan CEO Jamie Dimon warned of a possible increase to 8 percent due to persistent inflation.
The recent US inflation data has sparked concern among investors. The inflation rate for March was 3.5 percent, higher than the expected 3.4 percent, and significantly above the Federal Reserve's target of 2 percent for 'price stability'. This has led to a shift in market expectations, with the likelihood of a Federal Reserve interest rate cut in June falling to less than 20 percent following the release of the inflation data. Bitcoin, which had been trading at an all-time high of 69,000 US dollars, corrected by around 2 percent in response to the inflation news.
Bitcoin spot ETFs, approved in the US, experienced a substantial outflow of around 250 million US dollars over two days. This could be a sign of investor caution amidst the rising inflation rates and uncertainty about future interest rate decisions. Federal Reserve Chair Jerome Powell acknowledged the potential for a rate cut in the future but indicated that the economy was not yet at that point. He also noted that the Fed expected no immediate rate cut in June but remained open to reducing rates as inflation eased. However, JPMorgan CEO Jamie Dimon warned that the Federal Reserve could raise the key interest rate to 8 percent due to persistent inflation, highlighting the contrasting views on interest rate policy.
The recent US inflation data and Bitcoin's price correction have raised questions about the future of interest rates and the cryptocurrency market. While Federal Reserve Chair Jerome Powell hinted at a potential rate cut, the rising inflation rates and warnings from industry leaders like Jamie Dimon suggest that investors should remain vigilant. The outflow from Bitcoin spot ETFs and the cryptocurrency's price correction indicate that investors are closely watching the inflation situation and its potential impact on interest rates and the broader economy.
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