Cryptocurrencies Sway with the U.S.: Rising After Inflation Data
The cryptocurrency market is seeing a recovery this Wednesday. Bitcoin (BTC) is up 2% in the past 24 hours, surpassing $82,600, according to Binance.
Meanwhile, Ethereum (ETH) remains in decline, dropping up to 1.2% to $1,880.
Altcoins, on the other hand, are largely in the green, with gains of up to 20%. PI leads the surge, followed by Avalanche with a 6.7% increase and Dogecoin (DOGE) rising 4.5%.
Investors Brace for Further Volatility
Market uncertainty persists, especially after the U.S. Securities and Exchange Commission (SEC) delayed decisions on applications for XRP, DOGE, and Litecoin (LTC) exchange-traded funds (ETFs). Bloomberg analysts had estimated a 90% chance of approval for LTC, 75% for DOGE, and 65% for XRP before year-end, but the SEC’s indecision has left investors waiting.
At the same time, markets are closely watching U.S. trade policies under President Donald Trump. Yesterday, Trump announced plans to hike tariffs on Canadian steel and aluminum imports to 50%, in retaliation for Ontario’s electricity tax on U.S. exports. However, after Ontario withdrew the tax, Trump backtracked on the tariff increase. Still, the existing 25% tariffs on steel and aluminum, affecting Canada, Australia, the EU, and other countries, officially took effect on Wednesday.
In response, the European Union announced countermeasures, imposing tariffs on U.S. goods worth €26 billion starting in April. This has fueled market uncertainty, particularly for risk assets, amid growing recession fears in the U.S. Reflecting these concerns, Goldman Sachs has cut its U.S. growth forecast for 2025 from 2.4% to 1.7%, following Morgan Stanley’s recent downward revision from 1.9% to 1.5% for this year.
Crypto Market Tied to Broader Economic Trends
Until a new narrative emerges for cryptocurrencies, BTC could show greater correlation with equities in the short term, as both risk assets hover near recent lows. With ongoing trade risks, volatility is expected to increase, particularly as key U.S. macroeconomic data releases approach.
Today, the February Consumer Price Index (CPI) was released in the U.S., a crucial metric for Federal Reserve policy adjustments. The year-over-year CPI dropped to 2.8%, down from January’s 3%, while core inflation (excluding food and energy) fell to 3.1%, both outperforming analyst expectations. Last week, the Federal Reserve’s Beige Book had already hinted at rising inflationary pressures due to tariffs.
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