Markets: Bitcoin, crypto top 10 retreat with equities on signs of inflation uptick in U.S.
Bitcoin dipped below US$17,000 in Tuesday morning trading in Asia, as Ether and most other top 10 non-stablecoin cryptocurrencies lost ground. The retreat came as another U.S. indicator suggested inflation remains a risk to the economy. Litecoin bucked the trend, continuing to benefit from a tie-up with MoneyGram International Inc.
Bitcoin dropped 0.8% to US$16,982 in the 24 hours to 8 a.m. in Hong Kong, falling back from an overnight high of US$17,378, a price pattern seen among most top ten tokens by market capitalization. Ether fell 1.5% to US$1,260, after touching a high of US$1,302 overnight, according to CoinMarketCap.
Litecoin gained 4% to US$80.22. While the broader market has lost ground this month in the wake of the FTX.com collapse, Litecoin gained more than 47% in November as peer-to-peer payments company MoneyGram International Inc. began supporting the token along with Bitcoin and Ether.
Shiba Inu was the only other token to gain, rising 0.7% to US$$0.000009422, while leading memecoin Dogecoin led losses, falling 2.8% to US$0.101.
The total crypto market cap fell 0.7% to US$852 billion, while trading volume rose 34.4% to US$41.2 billion.
U.S. equities fell Monday. The Dow Jones Industrial Average lost 1.4%, the S&P 500 Index dropped 1.8% and the Nasdaq Composite Index fell 1.9%. The declines for the S&P 500 and Nasdaq were the biggest since Nov. 9.
U.S. services industry activity came in at 56.5% in November, according to the monthly survey by the Institute for Supply Management (ISM) released on Monday. A reading of 50% or greater shows the economy is growing, while 55% is considered to be very strong, raising concerns about inflation.
U.S. Federal Reserve Chair Jerome Powell last week had indicated the central bank may begin to taper the pace of interest rate rises, however strong job numbers for November combined with Monday’s ISM data have tempered those expectations among investors.
The Fed has been increasing interest rates since March to try to slow inflation, raising from near zero to a 15-year high of 3.75% to 4%, and has signaled that rates may end up exceeding 5%. The Fed has said it wants inflation in a target range of 2%. The consumer price index showed inflation was running at 7.7% in October, down from 8.2% in September.
