Bitcoin Hits 3-Month Low

Bitcoin fell below $73,500, reaching its lowest level since mid-August, as hotter-than-expected US inflation strengthened expectations of further interest rate hikes and weighed on demand for riskier assets. The decline brings its losses for the year to around 16%. US core consumer prices rose 0.3% month-on-month in October, exceeding market expectations, while headline inflation accelerated to 0.4%. Ahead of the inflation release, Fed Governor Christopher Waller had signaled that a 50 basis point rate increase in December should be considered if core inflation came in at 0.3% or higher. Meanwhile, Dallas Fed President Lorie Logan indicated after the release that a faster pace of rate hikes may be possible. Markets subsequently increased bets on further rate hikes through mid-2027. This drove Treasury yields and the US dollar higher, adding to pressure on cryptocurrencies.

Bitcoin fell to a three-month low, dropping as much as 3% to $73,100, as hotter-than-expected US inflation and expectations of further interest rate hikes weighed on demand for riskier assets. The decline brings its losses this year to around 17%.

Bitcoin fell below $76,600 on Thursday, reaching its lowest level in around eight weeks as a sharp selloff in technology stocks spread to other risk-sensitive assets, further weakening sentiment across cryptocurrency markets. The Nasdaq 100 plunged, led by semiconductor companies facing disappointing earnings outlooks and concerns that Democratic control of Congress could bring tighter regulation of the artificial intelligence industry. These developments have increased investor caution towards technology-related investments, spilling over into digital assets. Meanwhile, cryptocurrencies are already facing industry-specific headwinds, including the fallout from the Binance hack and fading retail investor interest. The renewed volatility in technology shares has added to these pressures, offsetting the potential support from easing US Treasury yields, which would normally improve the appeal of speculative assets.