close
close

Bitcoin sell-off continues even as stocks gain on inflation numbers

The sell-off in Bitcoin (BTC-USD) continued even though stock indices such as the Nasdaq (^IXIC) and the S&P 500 (^GSPC) closed higher on Wednesday after the U.S. inflation rate met economists' expectations.

According to data from Coingecko, Bitcoin traded just below the $58,000 (£45,150) mark on Thursday, down nearly 5%.

Bitcoin traded in a tight range above $61,000 ahead of the release of U.S. Consumer Price Index (CPI) inflation data on Wednesday. The CPI for July rose 2.9% year-on-year, falling below 3% for the first time since 2021.

The data appears to have supported stock prices as expectations grow among traders that the Federal Reserve will cut interest rates at its September meeting. Following the release of the inflation numbers, the CME FedWatch tool shows that interest rate traders now rate the probability of a 25 basis point rate cut at the next Federal Open Market Committee (FOMC) meeting at 62.5% and the probability of a 50 basis point cut at 37.5%.

Read more: Crypto Live Prices

Ethereum (ETH-USD) traded in a tight range between $2,650 and $2,750 before inflation on Wednesday, but on Thursday the price fell by about 5% to around $2,600.

The global cryptocurrency market capitalization was $2.15 trillion, down 3.5%.

Compared to the downturn in cryptocurrencies, stock prices rose following the latest US CPI report.

By the close on Wednesday, the S&P 500 was up 0.38% to 5,445.21, the Dow Jones Industrial Average (^DJI) was up 0.61% to 40,008.39 and the Nasdaq was up 0.029% to 17,192.60.

Read more: What are Bitcoin ETNs?

Stock futures continued their upward trend on Thursday, with the Nasdaq rising 0.24% and the NYSE Composite (^NYA) up 0.52% in premarket trading.

Despite the crypto downturn, lending and borrowing platform Aave's native token (AAVE-USD) rose more than 7%. According to Coingecko data, Aave was trading at $104.98 on Thursday.

The price surge comes after Aave founder Stani Kulechov posted on X.com that the protocol has reached around 40,000 active weekly users, above its previous peak reached in late 2022. Kulechov cited data from Dune Analytics suggesting the uptrend was driven by the emergence of new lending markets such as Base and Scroll.

Aave is a decentralized platform operating across 12 blockchain networks and specializes in over-collateralized lending. Users can deposit various major cryptocurrencies as collateral to borrow. The process is automated through smart contracts, including fund allocation, collateral management, and fee setting.

Download the Yahoo Finance app, available for Apple And Android.

You may also like...