Bitcoin, Ethereum Prices Plummet Ahead of US CPI and ECB Rate Decision
Bitcoin and Ethereum prices have dropped ahead of key economic releases in the US and Europe. As of September 5, Bitcoin (BTC) is trading at $79,599, down by 1.75%, while Ethereum (ETH) is down by 2.45% to trade at $2,455.
The drop comes as investors await the release of the US Consumer Price Index (CPI) data on September 11 and a potential interest rate hike by the European Central Bank (ECB). According to CoinGape prediction markets, there is currently a 50% chance that the Federal Reserve will hike interest rates by 25 basis points, while another 50% of investors are betting on the Fed leaving rates unchanged.
Data from MarketWatch shows that investors expect US inflation to remain at 3.4%, but if the CPI comes in lower than expected, it could reduce the odds of the Fed trimming rates and make President Trump's argument for lowering rates stronger. However, a 100% chance is priced in for the ECB to hike rates by 25 basis points on September 10.
Despite rising inflation concerns, both Bitcoin and Ethereum ETFs saw inflows worth $174 million and $26 million respectively on September 4, according to SoSoValue. This suggests that institutional demand remains strong despite hawkish central bank decisions tending to push investors away from risk assets.