Bitcoin dips below $30,000 as US inflation accelerates

U.S. annual inflation for May accelerated from April’s 8.3% to 8.6% — the highest since December 1981, CNBC reports citing the Labour Ministry. Against this backdrop, the price of bitcoin fell below $30,000.

At the time of writing, the first cryptocurrency was trading around $29,570. In the last 24 hours the asset declined by 1.9%, according to CoinGecko.

Ethereum, following the leader, moved into the red zone. The 24-hour drop stood at 3.7%. The current price of the cryptocurrency is $1,722.

U.S. stock indices also reacted to the news with declines: the S&P 500 fell 2.1%, the Nasdaq Composite — 2.75%, the Dow Jones Industrial Average — 1.94%.

In March 2022, the U.S. Federal Reserve (Fed) for the first time since December 2018, raised the target rate by 25 basis points to 0.25-0.5%. At that time, Bitcoin and the S&P 500 reacted with gains.

In May the Fed raised the target range to 0.75–1% per year, surprising markets. Against this backdrop, the price of the first cryptocurrency surpassed the $40 000 level.

Earlier, BitMEX co-founder Arthur Hayes назвал a likely drop of the first cryptocurrency to $30,000 by the end of the second quarter of 2022 due to Nasdaq’s decline.

Elon Musk заявлял that he was hodling cryptocurrencies in anticipation of rising inflation.

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