Crypto Market Update: A Day of Minimal Movement
The cryptocurrency sector experienced a largely stagnant day, as a brief rally triggered by more favorable U.S. inflation data quickly lost its momentum. Bitcoin (BTC) is currently trading at $82,800, reflecting a slight decline of 0.5% over the last 24 hours. Meanwhile, the CoinDesk 20 index, which tracks the top 20 cryptocurrencies (excluding exchange tokens, stablecoins, and memecoins), has dipped by 0.8% during the same timeframe.
Notably, ether (ETH) has emerged as the weakest performer in the index, experiencing a decline of 3.5% to approximately $1,880. The ETH/BTC ratio now stands at 0.022, a level reminiscent of April 2020, just prior to the surge of decentralized finance (DeFi) projects like Uniswap and MakerDao. Since its all-time high in November 2021, the ETH/BTC ratio has plummeted by an astonishing 67%.
“Today’s lower-than-expected Consumer Price Index (CPI) should ideally be seen as bullish, indicating the potential for quicker rate cuts,” stated Dr. Youwei Yang, Chief Economist at BIT Mining, in an email to CoinDesk. “However, the crypto market has not responded robustly, as weeks of pervasive market anxiety necessitate more than just a single positive data point to restore confidence.”
Yang further elaborated, “The critical issue at hand is the aggressive tariffs imposed by former President Trump, which could contribute to more persistent inflation while simultaneously jeopardizing market stability.” He also pointed out the recent layoffs initiated by the Department of Government Efficiency (DOGE). “This situation places the Federal Reserve in a precarious position: rising inflation stemming from tariffs complicates the decision to cut rates, while market downturns and job losses exert pressure to act sooner. Premature rate cuts could risk reigniting inflation, complicating future monetary policy.”
Currently, the market anticipates that the Federal Reserve may resume rate cuts, potentially starting as early as May or June, with speculations of up to 100 basis points in cuts by October.
On the equities front, U.S. stocks experienced a modest rebound on Wednesday following a substantial 10% drop over the preceding weeks. The Nasdaq managed to close with a gain of 1.2%, while the S&P 500 recorded a more modest increase of 0.5%.
