Bitcoin Plummets Sharply Following Disappointing Economic Data and Hawkish Comments from Fed Official

In the early hours of Friday in the United States, the price of Bitcoin plummeted sharply, reverting a previous uptrend that saw it reach a peak of $63,500. This sudden drop can be attributed to a combination of factors, including disappointing economic data and hawkish remarks from the Dallas Fed President, Lori Logan. The University of Michigan Consumer Sentiment Survey for May fell significantly to 67.4 from its previous value of 77.2, missing economists’ forecasts by a considerable margin. Moreover, one-year inflation expectations increased from 3.2% to 3.5%, also surpassing predictions of 3.2%. These developments come just a week after Federal Reserve Chair Jerome Powell dismissed concerns regarding stagflation, stating that he was not witnessing either the “stag” nor the “inflation.” Logan also expressed doubt about the sufficiency of existing Fed policies, highlighting “important upside risks to inflation.” While the news did lead to modest increases in the U.S. Dollar and bond yields, it had little impact on stock prices. However, Bitcoin declined rapidly, dropping by over 4% at one point to $60,700. As of press time, the price had slightly recovered to $61,000, representing a decrease of 0.6% over the preceding 24-hour period. The CoinDesk 20 Index has also experienced minimal growth during this time frame.