The Bitcoin price fell below $85,000 on Friday as investors digested a hotter-than-expected inflation print amid uncertainty surrounding the latest tariffs from U.S. President Donald Trump.
The core Personal Consumption Expenditures Price Index (PCE) rose 0.4% in February, marking its largest monthly increase in over a year, the U.S. Commerce Department reported on Friday. Economists had expected the index to show a 0.3% increase, per Trading Economics.
The Federal Reserve’s preferred inflation gauge showed a 2.8% increase annually, surpassing economists' forecasts of 2.7%. The core measure excludes volatile food and energy prices, serving as a more reliable measure of underlying inflation trends for experts.
As of Friday morning Eastern Time, Bitcoin was on track to finish the week up 2.3%, despite punching above $88,000 earlier this week, according to the crypto data provider CoinGecko. At the time of writing, Bitcoin had sunk below $85,000 and was trading 3.3% lower than this time yesterday.
The Crypto Fear & Greed Index has climbed out of the "extreme fear" zone it was in a month ago, but 90% of Myriad Market users think it won't exceed 45 by the end of the day—even though at the time of writing it has risen to 44. (Disclosure: Myriad is a prediction market and engagement platform developed by Dastan, parent company of an editorially independent Decrypt.)
Meanwhile, the Ethereum price led the alt plunge, trading 4.7% lower than it was this time yesterday. Solana has sunk to $129 in the past day after having lost 5.8%. Similarly, XRP has dropped to $2.20 after having fallen 5.7%.
“Bitcoin continues to demonstrate its resilience,” Matt Mena, a research analyst at the crypto asset manager 21Shares wrote in a Friday note, describing the leading cryptocurrency as “a non-sovereign, inflation-resistant asset that can weather all market cycles.”
On a monthly basis, consumer spending increased 0.4% in February, reversing a 0.3% drop from the previous month. Still, the measure fell short of a 0.5% increase, as economists expected, suggesting the U.S. economy is lagging as inflation ticks up.
“It starts confirming some of the worst fears around persistent inflation,” Carlos Guzman, a research analyst at the crypto market marker GSR told Decrypt, saying Friday’s report could escalate “potential fears of stagflation.”
Investors are bracing for a tariff deadline next week, when the Trump administration is scheduled to implement a new round of tariffs. While the president has tried to calm jitters ahead of April 2, he unveiled 25% tariffs on vehicle imports on Thursday.
Gold, another non-sovereign asset, has rallied alongside twists and turns in Trump’s trade policy. The precious metal surged to a record high of $3,080 per ounce on Friday.
With core PCE slightly higher than expected, the Fed may continue to hold interest rates steady at its next meeting, Mena said. Earlier this month, the central bank extended a months-long pause on reducing borrowing costs, pointing to Trump’s tariffs as an inflationary wild card.
Edited by Stacy Elliott.
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