Bitcoin (BTC) soared to $70,000 on Wednesday, reversing a steep decline after stronger-than-expected U.S. inflation data for March.
Bitcoin rose in early US time after a government report showed the consumer price index (CPI) rose faster than analysts expected, tempering investors' expectations for interest rate cuts this year. It fell nearly 4% to $67,500.
The decline reverberated across multiple asset classes, but Bitcoin gradually erased all losses, rising more than 1% in the past 24 hours and outperforming U.S. stocks and gold, both of which were significantly higher on the day. It ended with a decline. At the time of writing, Bitcoin was trading at $69,800, down slightly from the $70,000 level.
Most cryptocurrencies have lagged behind BTC, with the broader market CoinDesk 20 index down 0.6% over the same period, leading to major altcoins Polkadot (DOT), Bitcoin Cash (BCH), and Nia ( NEAR) fell by 5% to 7%. and Aptos (APT).
Decentralized exchange Uniswap's governance token (UNI) has plunged more than 10% after receiving an enforcement notice from the U.S. Securities and Exchange Commission, a precursor to regulatory action against the platform.
QCP Capital, a digital asset hedge fund, said the rally points to pent-up demand for bitcoin and investors see the drop as a buying opportunity.
“This pullback is not surprising as we continue to see strong demand for long-term BTC calls on our desks even during this sell-off,” QCP said in a Telegram update. “This shows structural bullishness in BTC.”
Will Clemente, co-founder of Reflexivity Research, said in the He pointed out that a high scenario would be for policymakers to increase the inflation rate above the current level. The target is 2% to help with the ballooning debt. “Bitcoin is insurance against this,” Clemente added.
Updated (April 10, 21:25 UTC): QCP Capital analyst comment added.
