Bitcoin Falls Ahead of CPI Data, Pressured by Speculation Over $4 Bln Govt Sale

Bitcoin's price fell on Thursday, losing more ground as risk appetite remained constrained ahead of key U.S. inflation data that is likely to factor

Bitcoin prices fell on Thursday as risk appetite remained largely constrained ahead of key U.S. inflation data that could factor into the outlook for interest rates.

The world’s biggest cryptocurrency was also pressured by some speculation over the sale of a large number of tokens that are being held by the U.S. government.

Broader crypto markets also declined on Thursday, largely lagging gains in other risk-driven markets, especially stocks.

Bitcoin fell 2.3% to $60,919.2 by 00:50 ET (04:50 GMT). In comparison, theｿＳＰＤＲ Ｓ＆Ｐ 500 (NYSE:SPY) rose about 0.2%.

The world’s biggest cryptocurrency has largely tracked movements in the dollar this year, with both inversely linked. But the dollar showed some resilience on Thursday, amid growing uncertainty over the Federal Reserve’s plans to cut interest rates further.

The minutes of the Fed’s September meeting showed policymakers largely supported the central bank’s 50 basis point cut last month. But they were uncommitted to a pace of future rate cuts.

This came as strong payrolls data from last week saw traders wipe out bets on a 50 bps cut in November, with CME Fedwatch now showing traders betting on a 25 bps cut.

Consumer price index data- due later on Thursday- is now squarely in focus for more cues on the path of interest rates. Headline CPI is expected to have eased slightly in September, while core CPI is expected to remain sticky.

The prospect of U.S. interest rates remaining high for longer bodes poorly for crypto, given that it points to lesser liquidity available for investing in speculative assets.

Some speculation over a mass token sale by the U.S. government- of tokens confiscated from the Silk Road marketplace- also weighed on Bitcoin.

The Supreme Court earlier this week upheld a court order for the government to liquidate 69,370 Bitcoin seized from the marketplace.

While such a liquidation does not appear imminent, the sale would see about $4 billion worth of Bitcoin being offloaded in the open market, which could batter prices.

Token distributions by defunct crypto exchange Mt Gox had battered Bitcoin prices earlier this year.

Among broader cryptocurrency prices, world no.2 crypto Ether fell 2.1% to $2,395.41.

SOL, XRP and ADA fell between 1% and 3%, while MATIC lost 0.3%.

Among meme tokens, DOGE shed 0.3%.

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