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Major cryptocurrency Bitcoin failed to rise in global markets this week in the wake of low US inflation. Bitcoin’s recent decoupling from the global market has caused investors to worry about Bitcoin’s prospects.
On Wednesday, the S&P 500 and Nasdaq closed at their highest since April 2022, but Bitcoin failed to join the rally.
The S&P 500 index crossed the 4,500 mark for the first time in 15 months on Thursday, closing at 4,545.86, according to Dow Jones Market Data.
The recent stock market has consumer price index A report showing US consumer prices posted the lowest annual rate of increase in three years.
However, the rise fell short of Bitcoin, the largest cryptocurrency in terms of market capitalization.
US Fed expected to halt rate hikes
U.S. Central Bank Official Said Earlier this week, it became clear that the US Federal Reserve (Fed) is nearing the end of its current monetary tightening cycle.
But officials added that the Fed is likely to raise rates at least one more time because inflation is still too high.
Fed policymakers have raised interest rates by 5 percentage points continuously since March 2022 to combat the highest U.S. inflation in 40 years.
positive CPI and producer price index (PPI) data further provoked the stock market rally.
Investors wary of Bitcoin not rising to stock prices
According to Bloomberg, IG Australia market analyst Tony Sycamore said Bitcoin is an outlier in terms of widespread risk-taking across almost all asset classes following U.S. inflation data. Stated. report. “For me, it’s not a good sign,” he added.
Sycamore also warned that Bitcoin is likely to fall towards $25,000-$26,000.
Some cryptocurrency analysts have also speculated that the US government’s recent release of $300 million worth of bitcoin may have hampered the cryptocurrency’s rally.
Digital asset management firm Grayscale Investments said in a memo that it expects lower U.S. inflation and a lower probability of Fed rate hikes to support the cryptocurrency market in the medium term.
However, the asset manager warned that Inverter may be interested in high-risk crypto assets that could lead to a decline in Bitcoin’s dominance.
At the time of writing, Bitcoin is trading at $31,195, up nearly 2% over the past 24 hours. Most altcoins also surged following a US court ruling in favor of Ripple in an ongoing lawsuit against the US SEC.