Crypto Markets Slide as Inflation Concerns Resurface

The crypto market took a hit on Thursday, driven by concerns over inflation and the potential sale of billions in Bitcoin seized by the U.S. government.
Bitcoin (BTC) fell 2.7% to $60,500, while Ethereum (ETH) dropped 1.4% to $2,394. Other major cryptocurrencies like Solana (SOL) and Polkadot (DOT) also posted declines, slipping by 3.7% and 1.5%, respectively.

Fears surrounding the U.S. government's potential sale of 69,370 BTC seized from the Silk Road marketplace have grown. Traders are concerned that the sale of such a large quantity of Bitcoin, valued at approximately $4.4 billion at current prices, could disrupt the market.
On Oct. 8, the U.S. Supreme Court declined to hear an appeal concerning the ownership of these coins, effectively clearing the way for the government to auction them. This decision upholds a 2022 ruling allowing the U.S. to sell the seized assets, sparking concerns over how such a sale might impact Bitcoin’s price.
Ryan Lee, Chief Analyst at Bitget Research, said that large-scale Bitcoin sales like this often trigger market volatility.
“If sold all at once or in a short period, market sentiment could take a hit due to the sudden increase in supply, leading to a wave of selling and a temporary drop in Bitcoin's price,” Lee said.
Lee added that some investors might preemptively adjust their positions to avoid risks, amplifying short-term volatility. “Some investors may worry that the influx of these Bitcoins could put downward pressure on prices, especially if sold on the open market.”
The broader crypto market has already been hit by risk-off sentiment. Over the past 24 hours, nearly 66,000 traders were liquidated, amounting to total liquidations of $184 million, per data from CoinGlass.
CPI Exceeds Expectations
In the U.S., the latest Consumer Price Index (CPI) report showed that prices rose at an annualized 2.4% in September. Economists polled by Dow Jones had expected a 2.3% rise. This data will likely play a key role in guiding the Federal Reserve's decision on interest rates at its November meeting.
The U.S. dollar continues to strengthen, with the dollar index (DXY) rising to 102.97, its highest level since mid-August. A strong dollar can often place downward pressure on crypto prices, as it makes dollar-denominated assets like Bitcoin less attractive to investors.
In addition, data from the Producer Price Index (PPI), along with earnings reports from major banks like JPMorgan and Wells Fargo, will provide additional insights into the health of the U.S. economy.
U.S. stock markets were flat on Thursday. The Dow Jones Industrial Average fell 0.2%, while the S&P 500 and Nasdaq swung between minor gains and losses.
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