Bitcoin fell below $60,000 on Thursday after the Federal Reserve’s preferred inflation gauge rose to its highest level since 2023, deepening pressure on crypto markets. The token was down 1.7 per cent at $59,936.45 by 17:53 ET, while spot Bitcoin ETF outflows accelerated.
Market Snapshot
Bitcoin (BTC/USD) remained close to a one-and-a-half-year low hit earlier in June, extending a sell-off driven by tighter US rate expectations, weak retail demand and a rotation into artificial intelligence-linked equities.
“The market is treating this as a rates shock first and a crypto story second,” a digital-assets analyst said in Thursday commentary. “ETF redemptions are turning a macro move into a positioning problem.”
Inflation Trigger
The core personal consumption expenditures price index rose 0.3 per cent in May and 3.4 per cent from a year earlier, the highest annual core reading since late 2023. The all-items PCE index ran at 4.1 per cent annually, lifted largely by energy costs tied to Middle East disruption.
The data reinforced expectations that the Fed may keep policy restrictive for longer, or consider another rate increase if inflation broadens. Higher rates tend to weigh on speculative assets because they raise the appeal of cash and bonds while reducing appetite for non-yielding holdings such as cryptocurrencies.
ETF Flows And Demand
Spot Bitcoin exchange-traded funds recorded $469 million in outflows on Wednesday, their largest withdrawal since June 2. The products were heading for a seventh straight week of redemptions, signalling softer institutional demand after earlier inflows helped support the market.
Glassnode data cited by market participants showed Bitcoin trading at a discount on Coinbase compared with global averages, a sign of limited US retail buying. That matters because spot ETFs and US exchange activity have become key sentiment gauges since regulated Bitcoin funds opened broader access to the asset class.
AI Rotation
Crypto’s decline came as investors shifted capital towards companies seen as direct beneficiaries of the AI spending boom. Micron Technology (MU) helped spark a rally in chip and memory shares after stronger earnings, although broader US indices closed mixed as Apple (AAPL) weighed on technology stocks.
Broader Crypto Reaction
Losses spread across major tokens after the inflation report. Ether (ETH/USD) fell 2.5 per cent to $1,575.49, while BNB slipped 0.6 per cent and XRP lost 3.2 per cent.
Solana (SOL) and Cardano (ADA) dropped 1.1 per cent and 2.2 per cent, respectively. Dogecoin declined 1.8 per cent, while the TRUMP token fell 3.3 per cent.
Outlook
Traders will watch whether Bitcoin can reclaim $60,000, whether ETF outflows slow, and how Fed speakers frame the latest inflation data. Oil prices, tariff-driven price pressures and the durability of the AI equity rally will also shape risk appetite in the coming sessions.
