Bitcoin (BTC) and Crypto Prices Have Moved Sharply Lower, Following Stock Markets

Bitcoin and crypto prices have moved sharply lower, following stock markets, as fears swirl the bitcoin price could be teetering on the verge of a major crash.

Crypto prices have moved sharply lower, following stock markets, as fears swirl the bitcoin price could be teetering on the verge of a major crash.

Now, as Elon Musk issues a surprise crypto price warning, the chief executive of the world’s largest asset manager has warned Donald Trump’s trade policies will stoke inflation.

What’s Happening

Elon Musk said on Wednesday he’s been running his companies “with great difficulty” amid a challenging macroeconomic environment, adding that he’s personally not concerned about a potential U.S. recession.

“I’m personally not worried about a recession. I think the broader macroeconomic environment has been quite difficult, and I’m running several companies with great difficulty in this environment,” Musk said at the CERAWeek energy conference, when asked about his outlook for the U.S. economy.

The billionaire tech chief’s comments come as the market remains focused on the outlook for interest rates and the U.S. economy amid a turbulent few months for markets.

The bitcoin price, ether price and other major cryptocurrencies have dropped sharply since the start of the year, wiping out nearly $1 trillion of value from the market in just a month. The world’s largest cryptocurrency is now down around 50% from its record highs hit in November.

The crypto market downturn has been driven largely by macroeconomic concerns, including fears of a U.S. recession and persistent inflation, according to Sean Dawson, head of research at decentralized options trading platform Derive.xyz.

“This market downturn is largely driven by broader economic concerns, including fears of a U.S. recession and persistent inflation,” Dawson said in emailed comments on Wednesday.

“The market is facing significant challenges as the macroeconomic environment deteriorates, and crypto assets are no exception. With bearish sentiment building, traders are turning to downside hedging strategies, especially as volatility surges across both traditional and crypto markets. The coming weeks will be critical for assessing how the broader economic situation impacts digital asset prices and trading behavior.”

The market will be closely watching the latest U.S. inflation data in the form of the consumer price index (CPI), which is expected to show consumer prices ticked up in February.

According to economists polled by Bloomberg, CPI is forecast to rise 0.2% for February, following no change in January. Economists surveyed by Dow Jones are expecting a 0.3% increase in the CPI and a 0.2% gain in core CPI.

A hotter-than-expected reading on inflation could put pressure on the Federal Reserve to keep interest rates higher for longer, potentially impacting the bitcoin price and other cryptocurrencies.

Top Takeaways

The bitcoin price and ether price have dropped sharply this week, following U.S. stock markets lower as fears mounted over a potential U.S. recession.

Elon Musk, the billionaire chief executive of electric carmaker Tesla (NASDAQ:TSLA), said on Wednesday he’s personally not concerned about a recession.

“I’m personally not worried about a recession. I think the broader macroeconomic environment has been quite difficult, and I’m running several companies with great difficulty in this environment,” Musk said at the CERAWeek energy conference.

The tech chief’s comments come as the market remains focused on the outlook for interest rates and the U.S. economy amid a turbulent few months for markets.

Bitcoin and crypto prices have dropped sharply since the start of the year, erasing nearly $1 trillion of value from the market in just a month and sparking fears the bitcoin price could soon crash.

Meanwhile, Goldman Sachs economists upped their odds of a recession over the next 12 months from 15% to 20%, attributing the gloomy outlook to Trump’s economic policies, which they said posed the “key risk.” Yardeni Research economists also raised their recession odds, upping them from 20% to 35% due to "Trump 2.0’s head-spinning barrage of executives orders, firings, and tariffs."

Last week, Federal Reserve chair Jerome Powell said the Fed is in no rush to cut rates, with the labor market still strong and inflation on a bumpy path toward its 2% goal.

The CME FedWatch Tool shows the market is heavily betting the Fed will leave rates on hold at its March meeting next week but is split over whether rates will be cut in May.

Bitcoin, ether and other major cryptocurrencies have dropped sharply this year, wiping out nearly $1 trillion of value from the market in just a month and sparking fears the bitcoin price could soon crash.

The world’s largest cryptocurrency is now down around 50% from its record highs hit in November, with the bitcoin price falling below the $70,000 level this week.

The crypto market downturn has been driven largely by macroeconomic concerns, including fears of a U.S. recession and persistent inflation, according to Sean Dawson, head of research at decentralized