Bitcoin (BTC-USD) has continued its sell-off, despite stock indices such as the Nasdaq (^IXIC) and S&P 500 (^GSPC) ending Wednesday in the green following a US inflation print that met economists’ expectations.
Bitcoin was trading just below the $58,000 (£45,150) mark on Thursday, down almost 5%, according to Coingecko data.
Bitcoin had been trading within a narrow range above $61,000 leading up to Wednesday’s release of the US Consumer Prices Index (CPI) inflation data. July’s CPI increased by 2.9% year-on-year, marking the first time since 2021 that it has fallen below 3%.
The data appears to have supported equities, with anticipation growing amongst traders that the Federal Reserve will cut interest rates at its September meeting. Following the inflation print, the CME FedWatch tool shows that interest rate traders are now giving the likelihood of a 25bps rate cut at the next Federal Open Market Committee Meeting (FOMC) at 62.5%, and the chances of a 50bps cut at 37.5%.
Read more: Crypto live prices
Ethereum (ETH-USD) was trading within a tight range between $2,650 and $2,750 before Wednesday’s inflation print, however, the price moved lower by around 5% on Thursday to around $2,600.
The global cryptocurrency market cap stood at $2.15tn, a decrease of 3.5%.
Stock indices gain after inflation reading
Compared to the cryptocurrency downturn, equities gained after the latest US CPI report.
By the close of trading on Wednesday, the S&P 500 had increased by 0.38% to 5,445.21, the Dow Jones Industrial Average (^DJI) rose by 0.61% to 40,008.39, and the Nasdaq added 0.029% to 17,192.60.
Read more: What are bitcoin ETNs?
On Thursday, stock futures sustained the uptrend, with the Nasdaq increasing by 0.24%, and the NYSE Composite (^NYA) rising by 0.52% in pre-market trading.
Aave bucks the current crypto downturn
Despite the crypto downturn, the native token of lending and borrowing platform Aave (AAVE-USD) increased by more than 7%. Aave was standing at $104.98 on Thursday, according to Coingecko data.
The price appreciation comes after Aave founder Stani Kulechov posted on X.com that the protocol has reached around 40,000 active weekly users, above the previous high reached in late 2022. Kulechov cited Dune analytics data that suggests the uptick has been driven by the emergence of new lending markets such as Base and Scroll.
Aave operates as a decentralised platform across 12 blockchain networks, specializing in overcollateralised loans. Users can deposit various major cryptocurrencies as collatoral to borrow against. The process is automated by smart contracts, including fund distribution, collateral management, and fee assessment.
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