Bitcoin Breaks Lower As US GDP Slows To 1.6%, Hints At Hot PCE Inflation

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Bitcoin and the broader financial markets faced a downturn as the United States’ Gross Domestic Product (GDP) revealed sluggish growth in the first quarter of 2024, casting a shadow on investor confidence. With the first quarter GDP figures falling short of expectations at a 1.6% annualized pace, concerns about inflationary pressures loom large, amplifying market volatility.

US GDP Grows 1.6% In Q1

The latest data from the Bureau of Economic Analysis paints a somber picture of the US economy, with first-quarter U.S. GDP growth clocking in at a modest 1.6%, well below the anticipated 2.5%. A commentary by The Kobeissi Letter underscored the severity of the situation, highlighting a worrying juxtaposition of weakening economic growth and surging inflation.

Meanwhile, the Core PCE Price Index witnessed a substantial jump from 2.0% to 3.7%, far surpassing estimates, while the PCE inflation data surged from 1.8% to 3.4%, stoking fears of an impending hawkish stance from the Federal Reserve.

Amid that, investor sentiment took a hit as concerns over escalating inflation and lackluster economic performance weighed heavily on cryptocurrency prices. Despite ongoing market sell-offs preceding the GDP release, the dismal data exacerbated the downward trajectory.

In addition, with expectations of a delayed rate cut by the Fed, recent gains in Bitcoin and other cryptocurrencies were swiftly wiped out, signaling a challenging road ahead for digital asset markets.

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