Shares of cryptocurrencies trading lower following a larger-than-expected increase in US PPI.
Portfolio Pulse from Benzinga Newsdesk
Cryptocurrency shares are trading lower due to a larger-than-expected increase in the US Producer Price Index (PPI), indicating potential inflationary pressures that could affect monetary policy and interest rates, thereby impacting the attractiveness of cryptocurrencies as an investment.
March 14, 2024 | 3:48 pm
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NEGATIVE IMPACT
Bitcoin (BTCUSD) is trading lower following the unexpected rise in US PPI, as investors weigh the potential for increased inflation and its impact on monetary policy, which could make cryptocurrencies less attractive compared to traditional investments.
The unexpected increase in the US PPI suggests potential inflationary pressures, which could lead to tighter monetary policy and higher interest rates. This environment typically makes riskier assets like Bitcoin less attractive, as investors may seek safer, interest-bearing investments.
CONFIDENCE 85
IMPORTANCE 75
RELEVANCE 80
NEGATIVE IMPACT
Ethereum (ETHUSD) sees a decline in its trading value in response to the larger-than-expected US PPI increase, reflecting concerns over inflation and its potential to influence monetary policy, possibly diminishing the appeal of cryptocurrencies.
The rise in the US PPI indicates looming inflationary pressures, which could prompt a shift in monetary policy towards higher interest rates. Such a shift tends to decrease the attractiveness of non-interest-bearing assets like Ethereum, as investors might prefer investments with interest returns in an inflationary scenario.
CONFIDENCE 85
IMPORTANCE 75
RELEVANCE 80