Bitcoin drops below $30,000, as hot inflation report causes investors to shun risky assets

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A Bitcoin coin lies on a screen showing the Bitcoin – US dollar exchange rate.
Fernando Gutierrez-Juarez | picture alliance | Getty Images

The price of bitcoin fell below the $30,000 mark on Wednesday for the second time this week, after new data showed inflation is still running near 40-year highs.

Bitcoin fell about 7% to $29,196.10, according to Coin Metrics. Ether was down 8% to $2,160.46.

Cryptocurrencies declined with stock futures after the Bureau of Labor Statistics reported consumer prices for the month of April jumped 8.3%, which was slightly higher than expected by economists polled by Dow Jones.

That spooked investors, leading them to exit risk assets including crypto. Cryptocurrencies remain highly correlated with equities. Futures tied to the major stock indexes were lower Wednesday morning.

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This is the second time this week bitcoin has fallen into the $29,000 range. Analysts have called $30,000 a key level for the largest cryptocurrency by market cap, and said it could fall even further if it can’t hold there.

This time last week bitcoin touched a recent high of $40,000 but quickly reversed the next day and has been steadily hitting new lows since.

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