According to Cointelegraph, on November 14, Bitcoin (BTC) fell 4.1% due to US inflation data slightly higher than market expectations, similar to the trend of S&P 500 index futures.
Although the U.S. Producer Price Index (PPI) rose 2.4% year-on-year in October, slightly higher than the expected 2.3%, the market's expectation for the Federal Reserve to cut interest rates by 0.25% in December remained unchanged. However, the market is skeptical about whether the Fed can maintain its path of interest rate cuts until 2025.
Bitcoin has historically benefited from inflation concerns, but government liquidity injections in 2021 and 2022 have weakened that effect. Today, despite a strong labor market, traders are cautious about corporate earnings pressure.
The U.S. government's spending policies could affect demand for Bitcoin. If it succeeds in limiting spending growth, demand for Bitcoin as an inflation hedge could decrease, but its scarcity and transparency remain attractive.
Bitcoin's recent performance is consistent with the stock market, reflecting concerns about high inflation. However, as U.S. fiscal challenges are likely to persist, Bitcoin may still move towards its $100,000 target under short-term pressure.
