Bitcoin Price Drops to $66K Despite Soft Inflation Report

Takeaways

• The US CPI remained flat in May, beating forecasts and lifting bitcoin prices by nearly 4% on Wednesday: But bitcoin prices quickly retreated on Thursday as traders grappled with the possibility of just one rate cut by the Federal Reserve by the end of the year.
• Trump voices support for Bitcoin mining at Mar-a-Lago: President Biden’s campaign also consulted the crypto industry on his digital asset policy.
• Gensler confirms spot ether ETFs are coming soon: In a Senate Banking hearing on Thursday, SEC chairman Gary Gensler said he expects spot ether ETFs will begin trading this summer.
• GameStop's stock drops 12%, impacting related meme tokens: The dip comes after recent highs and announcements of new share sales and declining quarterly sales.
• HSBC Bank's China branch begins offering e-CNY services to corporate clients: It’s the first foreign bank to support the digital yuan to facilitate transactions and asset management.
• The ZKsync Association will airdrop 3.675 billion ZK tokens next week: Early users and contributors will receive the distributions, with claims available until January 2025.

Bitcoin Rallies on Soft Inflation Data after CPI Remains Flat in May

In May, the U.S. Consumer Price Index (CPI) remained steady, defying economist expectations of a 0.1% increase and dropping from April’s 0.3% bump. CPI rose by 3.3% year-over-year, slightly below the anticipated 3.4% and April’s figure.

Core CPI, which excludes volatile food and energy prices, increased by 0.2% in May, better than the forecasted 0.3% rise and down from April's 0.3% bump. Annually, core CPI grew by 3.4%, falling short of the expected 3.5% and April’s 3.6%.

Bitcoin reacted positively to the softer inflation data on Wednesday, climbing nearly 4% to $69,400. But the price quickly retreated below $67,000 on Thursday, likely because of the Federal Reserve's hawkish interest rate projections.

Earlier this year, traders anticipated five or six 25 basis point cuts in 2024 by the end of December, but expectations have since dwindled to one cut in 2024, with the first cut projected for September. In the run up to the CPI announcement, investors reportedly withdrew some $200 million out of spot BTC ETFs.

Crypto and Retirement Accounts: 401ks and IRAs

In the United States, some of the most common vehicles for saving for retirement are a 401(k) and an IRA. As blockchain technology becomes more mainstream worldwide, an increasing number of investors looking to save for retirement are also considering crypto investment options. A growing number of financial technology (FinTech) companies and legacy financial institutions are now offering crypto-based 401(k) or IRA products.

What are some of the most popular methods for investing in a crypto retirement plan?

Learn more here.

Onward and Upward!

Team Gemini