Bitcoin drops to one-month low as US CPI report hurts sentiment

Bitcoin continued its selloff into Asia’s Monday morning as part of broader declines in cryptocurrencies after a sharp rise in US inflation triggered risk-off sentiment.

The world’s largest digital token tumbled as much as 6.4 per cent to $25,593, its lowest level since May 12, in a seventh day of losses. Ether fell as much as 9 per cent to $1,342.32. Other coins tracked by Bloomberg including Cardano, Dogecoin, Polkadot and Avalanche were also in the red.

“Cryptos remain at the mercy of the Fed and stuck in a merry dance with the Nasdaq and other risk assets,” said Antoni Trenchev, co-founder and managing partner of crypto lender Nexo. “We’re hearing Bitcoin forecasts in the mid-teen and single-digit thousands which tells you the type of macro environment crypto is facing for the first time — and the levels of fear.”

Traders are boosting bets for a more aggressive pace of Federal Reserve tightening after data on Friday showed US inflation jumped to a fresh 40-year high in May. This triggered a selloff in risk assets including crypto and stocks.