Bitcoin has slipped lower, mirroring declines in global stocks after the release of a higher-than-expected U.S. inflation report and a rise in weekly jobless claims. As of 12:31 p.m. ET, Bitcoin's price fell approximately 2% in the past 24 hours, resting around $60,600, as reported by The Block's Bitcoin Price Page.
Global equities have followed suit, with Dow futures down 0.45% at 42,013. In Europe, the FTSE declined by 1% to 8,219, while the DAX saw a slight decrease of 0.05%, sitting at 19,084.
Despite these economic concerns, analysts maintain a positive outlook on Bitcoin's longer-term prospects, particularly in light of potential changes in monetary policy and the upcoming U.S. elections.
The U.S. Consumer Price Index (CPI) rose by 0.2% in September, marginally surpassing the anticipated 0.1% increase, according to data from the U.S. Labor Department. This slight uptick was primarily driven by increasing food costs, yet the annual inflation rate recorded its smallest growth in over three years, indicating a broader trend of slowing inflation.
Alongside the inflation report, the U.S. also experienced an uptick in weekly jobless claims, adding further uncertainty to the economic outlook. Nevertheless, market expectations remain high for the U.S. Federal Reserve to cut interest rates in November. The CME FedWatch tool currently indicates an 89.1% probability of a 25 basis-point rate reduction at the Federal Reserve's meeting on November 7.
Many analysts identify the upcoming U.S. presidential election in November as a significant market driver. Coinbase Head of Research, David Duong, remarked that the cryptocurrency market could witness increased adoption by institutional investors seeking a means to trade election outcomes.
Duong expressed his perspective on how the U.S. elections might influence the market: "We expect the market reaction to ultimately be neutral to positive in the fourth quarter of 2024. Even if there is a sell-off post-event, we anticipate institutional investors stepping in due to the clear upside potential for the asset class."
Furthermore, Duong highlighted that the Federal Reserve’s shift towards monetary easing in September, combined with recent stimulus efforts from China, may take months to fully impact liquidity in the market. "Overall, we remain optimistic about the outcome for crypto, especially from a regulatory perspective, as we approach the election," he added.
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