Bitcoin dropped below $80,000 on Thursday as U.S. GDP and PCE data suggested more Fed rate hikes. A slide in AI-related stocks added to the pressure, and most altcoins fell with the largest crypto.
Bitcoin slipped below $80,000 on Thursday as risk sentiment took a hit from U.S. economic data that suggested more Federal Reserve interest rate hikes. A slide in artificial intelligence-related stocks on Wall Street also weighed on the market. The largest crypto was last down 2.7% to $79,047.7 by 18:48 ET.
Fed holds rates, but two officials wanted a hike
The Federal Open Market Committee on Wednesday kept the key policy rate steady in a 10-2 vote. Governor Lisa Cook and Cleveland Fed President Beth Hammack preferred a quarter-point hike. The decision followed the FOMC's first rate hike in over three years in September.
Markets now widely expect the Fed to raise rates at its final meeting of the year in December. Fed Chair Kevin Warsh declined to provide any forward guidance on interest rates, and he noted that a slew of economic data would arrive before then.
Hot data and an AI selloff hit sentiment
That data began arriving Thursday. U.S. real GDP ticked up 3.4% in Q3, above the 2.2% growth in Q2 and economists' expectations of 3.2%.
Meanwhile, the headline personal consumption expenditures price index rose 0.5% M/M in September, while core PCE rose 0.3%. On a Y/Y basis, headline PCE climbed 3.6% and core PCE inched up 3.1%, above the Fed's 2% target for inflation.
The AI trade also suffered on Thursday, primarily due to a post-earnings plunge in Alphabet. A push in debt-based financing by companies to fund AI infrastructure buildouts has led to worries about unsustainable returns.
Altcoins track Bitcoin lower
Most altcoins followed Bitcoin into negative territory. Ether shed 3.6% to $2,275.97, while XRP slid 6%.
Solana, Cardano and BNB dropped 5.3%, 6.7% and 7.1%, respectively. Dogecoin and $TRUMP fell 4.7% and 9.3%, respectively.
Source: Investing.com
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