- Bitcoin fell below $85,000 following higher-than-expected inflation data, retreating from its earlier $88,000 peak despite being on track for a 2.3% weekly gain.
- February’s core PCE inflation rose 0.4% monthly and 2.8% annually, exceeding economist forecasts and potentially delaying Federal Reserve interest rate cuts.
- Cryptocurrency markets declined broadly amid economic uncertainty, with Ethereum, Solana, and XRP experiencing steeper drops than Bitcoin as investors also weigh upcoming Trump administration tariffs.
Bitcoin retreated below the $85,000 mark on Friday as investors processed inflation data that came in hotter than anticipated, combined with growing concerns about President Donald Trump‘s upcoming tariff policies. The leading cryptocurrency dropped 3.3% in a 24-hour period, pulling back from its midweek surge above $88,000.
The market reaction followed the release of February’s Personal Consumption Expenditures Price Index (PCE) data, which showed concerning inflation trends. The core PCE—which excludes volatile food and energy components—increased 0.4% for the month, marking its largest monthly jump in over a year according to the U.S. Commerce Department report. This exceeded the 0.3% increase economists had anticipated, based on Trading Economics forecasts.
On an annual basis, core PCE inflation reached 2.8%, surpassing the 2.7% rate economists had predicted. The Federal Reserve closely monitors this particular inflation measure when making monetary policy decisions, as it provides clearer insight into underlying inflation pressures.
Consumer spending data painted a mixed economic picture, showing a 0.4% increase in February—reversing January’s 0.3% decline but still falling short of the 0.5% growth economists had expected. This combination of higher inflation with weaker-than-anticipated spending has raised concerns about economic health.
Carlos Guzman, research analyst at crypto market maker GSR, told Decrypt that the report is “confirming some of the worst fears around persistent inflation,” potentially escalating “potential fears of stagflation.”
Despite Friday’s decline, Bitcoin remained resilient compared to other major cryptocurrencies, with data from CoinGecko indicating it was still on pace for a 2.3% weekly gain. Matt Mena, research analyst at crypto asset manager 21Shares, described Bitcoin in a Friday note as “a non-sovereign, inflation-resistant asset that can weather all market cycles.”
Other cryptocurrencies experienced more pronounced declines, with Ethereum leading the altcoin retreat by falling 4.7% over the past day. Solana slid 5.8% to reach $129, while XRP dropped 5.7% to $2.20.
Markets are also bracing for the Trump administration’s upcoming tariff deadline on April 2nd. While the president has attempted to ease market concerns, he announced 25% tariffs on vehicle imports on Thursday, signaling a continuing commitment to protectionist trade policies.
Gold, another asset often viewed as an inflation hedge, surged to a record high of $3,080 per ounce on Friday according to Trading Economics data.
The latest inflation figures suggest the Federal Reserve may maintain current interest rates at its upcoming meeting. Earlier this month, the central bank extended its pause on interest rate reductions, specifically citing Trump’s tariff policies as a potential inflationary risk factor.
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