Bitcoin and cryptocurrency prices have sharply declined, mirroring the stock market’s downturn, with growing concerns that the bitcoin price may be on the brink of a significant collapse.
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The price of bitcoin has dropped below $80,000, causing a ripple effect across the broader cryptocurrency market, which has wiped out $1 trillion in value over the past month, even as optimistic traders anticipate a potential “game-changer” with President Donald Trump.
As Elon Musk issues an unexpected warning on crypto prices, the CEO of the world’s largest asset manager, BlackRock, has cautioned that Trump’s trade policies may fuel inflation—dampening hopes that the Federal Reserve will reduce interest rates until 2025.
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Larry Fink, CEO of BlackRock, has warned that inflation could resurface in 2025, … [+]
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“I believe that if we are becoming a bit more nationalistic—and I’m not implying that’s inherently negative, it resonates with me—that it will lead to higher inflation,” Larry Fink stated at the CeraWeek conference, as reported by Reuters.
In related news, Goldman Sachs economists have increased their recession probability for the upcoming 12 months from 15% to 20%, citing Trump’s economic decisions as a significant risk. Similarly, economists from Yardeni Research have also raised their recession odds from 20% to 35% due to “Trump 2.0’s whirlwind of executive orders, dismissals, and tariffs.”
Recently, Federal Reserve Chair Jerome Powell remarked that there’s no urgency for the Fed to lower rates, given the robust labor market and the uneven path of inflation towards the 2% target.
The CME FedWatch Tool indicates that market participants heavily favor the Fed maintaining rates at its upcoming March meeting, although opinions are divided on potential cuts in May.
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The price of bitcoin has significantly declined from its peak, raising concerns of a possible bitcoin … [+]
Forbes Digital Assets
On Wednesday, the latest U.S. inflation figures will be released in the consumer price index (CPI), which is expected to show an uptick in consumer prices for February, according to Bloomberg, underscoring the Fed’s sluggish efforts to alleviate inflation and potentially raising fears of stagflation—defined by an economic downturn coupled with rising prices.
“This market decline is primarily influenced by broader economic anxieties, including concerns about a U.S. recession and ongoing inflation,” declared Sean Dawson, head of research at decentralized options trading platform Derive.xyz, in an email statement.
“The market is encountering formidable challenges as the macroeconomic landscape deteriorates, and cryptocurrencies are not immune. With growing bearish sentiment, traders are resorting to downside hedging strategies, especially as volatility spikes across both traditional and cryptocurrency markets. The upcoming weeks will be pivotal in determining how the broader economic climate influences digital asset pricing and trading activities.”
