Bitcoin fell on Friday, as a hotter-than-expected inflation report for February, soured the outlook for sooner Federal Reserve rate cuts, triggering a sea of red across risk assets.
The world’s largest cryptocurrency fell 3.9% to $83,866.6 by 10:05 ET (14:05 GMT).
President Donald Trump on Wednesday announced the imposition of a 25% tariff on all foreign-made cars and auto parts, effective April 2.
In response, Canadian Prime Minister Mark Carney declared that the longstanding trade relationship with the U.S. is “over,” advocating for a comprehensive renegotiation of trade agreements between the two nations.
Carney vowed to retaliate if U.S. President Donald Trump enforces new auto tariffs.
Trump also has plans to enforce separate global reciprocal tariffs on April 2, aiming at nations with major trade imbalances with the U.S.
These developments have heightened investor concerns about an all-out global trade war, leading to a broader risk-off sentiment in financial markets.
This led to a significant sell-off in global stock markets. Major U.S. stock indexes closed lower on Thursday, while most Asian stock indexes slumped early Friday.
In such environments, investors typically move away from volatile assets like cryptocurrencies, favoring traditional safe-haven assets such as gold.
Gold was trading at a record high in Asian trading on Friday.
The Federal Reserve’s preferred inflation gauge, the core personal consumption expenditures (PCE) price index, rose 0.4% in February, exceeding expectations and marking the largest monthly increase since January 2024.
This pushed the annual core inflation rate to 2.8%, slightly above the 2.7% anticipated by economists surveyed by Dow Jones.
Core PCE inflation, which excludes food and energy, is considered a more reliable indicator of long-term price trends.
The broader PCE price index, which includes all items, rose 0.3% for the month and 2.5% year-over-year, matching forecasts.
Meanwhile, consumer spending increased by 0.4% in February, falling short of the 0.5% forecast. Personal income, however, surged 0.8%, doubling the 0.4% estimate, according to data from the Bureau of Economic Analysis.
After lowering rates by a full percentage point in 2024, the Fed has kept rates steady this year, with officials now voicing concerns about the inflationary impact of new import tariffs.
While economists typically view tariffs as one-time events that do not drive sustained inflation, the broad scope of Trump’s tariffs and the possibility of an escalating global trade war are raising the risks of prolonged price pressures.
Nasdaq has submitted a 19b-4 filing to the U.S. Securities and Exchange Commission (SEC) seeking approval to list a spot Avalanche (AVAX) exchange-traded fund (ETF) managed by Grayscale. This ETF would directly hold AVAX, tracking the price of the Avalanche network’s native token.
Grayscale currently manages an Avalanche Trust with a 2.5% management fee. If approved, the ETF could offer a more cost-effective and flexible alternative for investors seeking exposure to AVAX.
However, so far, the SEC has not approved any spot altcoin ETFs other than those providing exposure to ether.
AVAX is currently trading at $20.16, down around 8% over the past 24 hours due to a broader market decline.
Most altcoins saw steeper declines than Bitcoin.
World no.2 crypto Ethereum slumped 6% to $1,880.67.
World no. 3 crypto XRP dropped 6.5% to $2.19.
Solana declined 6.7%, and Cardano dropped 5%, while Polygon plunged 9.6%.
Among meme tokens, Dogecoin fell 5.8%, while $TRUMP plummeted 8%.
Ayushman Ojha contributed to this report.
