Bitcoin (BTC-USD) continues to face selling pressure even as stock indexes such as the Nasdaq (^IXIC) and S&P 500 (^GSPC) closed higher on Wednesday after U.S. inflation data came in line with economists’ expectations.
Bitcoin was trading just below $58,000 (£45,150) on Thursday, down around 5%, according to CoinGecko data.
Bitcoin had been trading in a tight range above $61,000 until Wednesday’s release of U.S. Consumer Price Index (CPI) inflation data, which showed a 2.9% year-over-year increase in July, falling below 3% for the first time since 2021.
The data appeared to support the stock market, raising expectations among traders that the Federal Reserve will cut interest rates at its September meeting. Following the inflation release, the CME FedWatch tool indicates that interest rate traders see a 62.5% chance of a 25 bps rate cut at the next Federal Open Market Committee (FOMC) meeting, and a 37.5% chance of a 50 bps rate cut.
Read more: Live Cryptocurrency Prices
Ethereum (ETH-USD) had been trading in a tight range of $2,650 to $2,750 prior to Wednesday’s inflation announcement, but prices fell roughly 5% to around $2,600 on Thursday.
The global cryptocurrency market capitalization was $2.15 trillion, down 3.5%.
Stock indexes rise on inflation figures
Compared to the decline in cryptocurrencies, stocks rose after the latest US CPI report.
As of Wednesday’s close, the S&P 500 was up 0.38% to 5,445.21, the Dow Jones Industrial Average (^DJI) was up 0.61% to 40,008.39 and the Nasdaq was up 0.029% to 17,192.60.
Read more: What is a Bitcoin ETN?
Stock futures maintained their upward trend on Thursday, with the Nasdaq up 0.24% and the New York Stock Exchange Composite Index (^NYA) up 0.52% in pre-market trading.
Aave bucks current cryptocurrency downturn
Despite the cryptocurrency selloff, lending platform Aave’s native token (AAVE-USD) rose more than 7%. Aave was trading at $104.98 on Thursday, according to data from Coingecko.
The story continues
The price rise came after Aave founder Stani Krechev posted on X.com that the protocol’s weekly active user base had reached roughly 40,000, surpassing the previous high it had hit in late 2022. Krechev cited Dune Analytics data suggesting the rise is being driven by the emergence of new lending marketplaces such as Base and Scroll.
Aave operates as a decentralized platform across 12 blockchain networks and specializes in over-collateralized lending. Users can deposit and borrow a range of major cryptocurrencies as collateral. Processes such as fund distribution, collateral management, and fee assessment are automated through smart contracts.
Download the Yahoo Finance app, available for Apple and Android.