Bitcoin Rebounds Near $104,000 as Fed Rate Cut Expectations Grow on Weak Inflation Data
Cryptocurrencies rallied on Friday amid growing expectations for lower U.S. interest rates, following weaker-than-expected key inflation readings. Bitcoin held steady above $100,000 despite Coinbase security concerns.
Bitcoin rose nearly 2% to $103,950 by 09:38 ET (13:38 GMT), continuing its recovery after hitting a weekly high of $105,200 earlier in the week. Despite some profit-taking pressure mid-week, the dovish policy outlook from the U.S. Federal Reserve helped lift sentiment.
The latest economic data showed that both the US PPI and CPI were lower than expected, increasing the possibility that the Fed will move to cut interest rates sooner than expected, possibly as early as next quarter. This weakened the USD and created momentum for capital flows into alternative assets such as Bitcoin and gold.
Dovish Fed - a driver for risk assets
Data from the US Department of Labor released on Thursday showed that producer prices fell 0.2% in April - the sharpest decline since the 2009 financial crisis. Meanwhile, the previously released CPI index showed consumer prices increased by just 0.3%, lower than expected.
Investors are now re-pricing the possibility that the Fed could cut interest rates twice this year. This prospect increases the appeal of speculative assets such as cryptocurrencies and technology stocks.
Coinbase Hacked – Damage Could Reach $400 Million
However, market sentiment remained cautious as Coinbase Global (NASDAQ: COIN) – the largest cryptocurrency exchange in the United States – revealed that it was investigating a significant cyberattack.
According to the company, an anonymous hacker group gained access to a small amount of customer data including names, addresses and emails. While no financial information or passwords were leaked, Coinbase warned that the financial damage could range from $180 million to $400 million.
COIN shares fell 6.8% on Thursday, snapping a strong run after being added to the S&P 500.
Ripple vs. SEC: Court Rejects Early Settlement Request
In a notable legal development, New York Judge Analisa Torres denied a joint motion from the U.S. Securities and Exchange Commission (SEC) and Ripple Labs to lift the ban and reduce the fine.
The court said that jurisdiction now rests with the Second Circuit Court of Appeals and that neither side has met the “high bar” for a Rule 60 exemption, meaning the Ripple-SEC case will continue into 2025.
Altcoins Slightly Rebound, Meme Tokens Continue to Gain Attention
Ether (ETH) rose 2.4% to $2,610, continuing to hold the number two spot in the market. Solana (SOL) and Cardano (ADA) rose 2.2% and 2.7%, respectively.
Polygon (MATIC) led the altcoin pack with a 3.8% gain, while Dogecoin (DOGE) and political token $TRUMP both rose more than 3%.
The return of risk appetite is driving money back into digital assets, especially as investors expect a monetary easing cycle to begin sooner than expected.
COIN Market Analysis: Opportunity or Risk?
Despite facing cybersecurity risks, Coinbase stock has received great attention from investors, especially after being included in the S&P 500 index. Many experts believe that if the Fed actually moves to cut interest rates, the digital asset market will benefit, and COIN could be one of the pioneering stocks to catch the trend.