Bitcoin (BTC) recovered after falling nearly 5% on Thursday, with a number of digital assets heavily impacted by surge in inflation in the United States.
The news comes as January’s US Inflation Report showed a 7.5% rise in prices, the fastest price rise since February 1982.
Economists had predicted there would be a 7.3% rise in prices in January, before those expectations were exceeded when the report was released on Thursday.
the US Federal Reserve is expected to raise interest rates next month, which could lead to lower inflation levels over time.
The tightening of monetary policy currently adopted could have an additional impact on a number of speculative markets, such as equities and cryptocurrencies.
In terms of most recent prices, bitcoin has outperformed the majority of cryptocurrencies. However, it is normal that during periods of bear markets, investors place a higher premium on bitcoin due to its lower risk profile compared to altcoins.
Looking closer at the numbers, BTC was down 1.25%, while there was a 4% drop in ETH and a 6% drop in SOL.
Stocks also saw a notable decline on Thursday, with the S&P falling 2% in the past 24 hours. Meanwhile, Treasury yields have risen to over 2%.
Fundstrat maintained its strong support for the crypto despite the current situation, and it advised clients to keep buying despite the choppy price action, as well as macroeconomic uncertainty.
MRB Partners, an investment strategy firm, pointed out this week that stocks and bonds will continue to struggle in light of the shift in global monetary policy over the next year.
“Government bond yields are still on the rise next year, although a pause is likely looming in the near term,” MRB wrote.