Bitcoin (BTC) Briefly Dips Below $95K as Inflation Data Dims Hopes of a Rate Cut

Hotter-than-anticipated inflation data saw bitcoin (BTCUSD) briefly dip below $95,000 as investors' hopes of a rate cut by the Federal Reserve at its March meeting dimmed further.

Bitcoin price dropped below $95,000 briefly on Wednesday after hotter-than-expected inflation data dashed hopes of a rate cut by the Federal Reserve at its March meeting.

The world's largest cryptocurrency by market cap later recovered to trade at around $96,000 as of early afternoon Wednesday. Bitcoin-related stocks followed that pattern, with Marathon Digital (MARA), Coinbase (COIN) and MicroStrategy (MSTR) also showing gains.

But the latest inflation reading, coupled with uncertainty around tariffs that could stoke inflation further, bodes poorly for bitcoin as an investment, analysts said. Higher rates would imply greater yields on Treasuries, making them more attractive compared to assets like bitcoin from both a return and a riskiness perspective.

What Happened To Bitcoin In 2025?

Bitcoin hit a record high of over $109,000 less than a month ago on January 20th, ahead of the inauguration of U.S. President Trump. Trump was largely expected to herald a friendlier regulatory landscape, and has already issued several executive orders pertaining to digital assets. But that optimism hasn't panned out for investors, with bitcoin's price remaining volatile since then.

Some market observers, like BlackRock's head of digital assets, have suggested that bitcoin could be viewed as a risk-off asset, performing well during times of uncertainty, as opposed to a risk-on asset like stocks or high-yield bonds, which gain during periods of positive market sentiment.

However, that thesis has been called into question in recent months, with the cryptocurrency often moving in conjunction with risk-on assets like traditional equities, which also fell following today's inflation reading.

Despite the recent price decline, inflows into spot bitcoin exchange-traded funds (ETFs) have been positive every week so far in 2025, according to Farside Investors. However, the spot bitcoin ETFs have seen a combined $243 million in outflows so far this week.