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Bitcoin took a tumble on Friday, plummeting to an intraday low of $23,000. Data from CoinMarketCap revealed that the leading cryptocurrency suffered a loss of 3.3% in the past 24 hours.
The drop in Bitcoin’s value followed the downward trend of U.S. stocks, as the Dow Jones Industrial Average plunged by 390 points or 1.2%, while the S&P 500 and Nasdaq Composite slid by 1.6% and 2.0%, respectively.
This week has been a losing one for the major averages, leaving investors feeling uneasy.
The sharp decline was triggered by the release of data showing that the core monthly personal consumption expenditure rose 0.6% from December to January, surpassing the 0.3% forecast, and adding fuel to the already heated battle against inflation.
Cleveland Fed President Loretta Mester reiterated on Friday morning that while inflation has moderated, the overall level matters and remains too high.
Mester also noted recent research from the Cleveland Fed suggesting that inflation could be more persistent than previously thought.
As noted by market analyst Jeroen Blokland, the odds of a 50 basis point hike in the Fed Target Rate just surged to almost 40% after the higher-than-expected core PCE inflation. The market was previously expecting a 25-basis-point hike.
The odds of a 6.0% Fed target rate in July are now approaching 9%, causing concern among investors.