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Bitcoin slips for a third straight day, slips under $80k after hot April PPI data
Bitcoin slipped on Wednesday, extending a spate of losses to a third straight day after scaling as high as $82.4k on the weekend. A protracted impasse in Iran, along with hot U.S. inflation data, has kept a lid on risk sentiment for cryptocurrencies this week.
The world’s largest crypto was last down 1.4% to $79,472.8 by 21:39 GMT
U.S. producer inflation comes in hot
The U.S. economic calendar was in focus, with April producer price index (PPI) readings on the docket a day after the release of April consumer price index (CPI) data.
According to the Bureau of Labor Statistics, U.S. headline PPI in April ticked up 1.4% M/M, the largest monthly advance since March 2022. On a Y/Y basis, headline PPI jumped 6%, the biggest since December 2022. Analysts and economists had predicted a climb of 0.5% M/M and 4.9% Y/Y.
The PPI update follows a similarly hot CPI print, which showed a big impact of surging oil prices due to the Middle East conflict. The PPI readings hinted that the spike in oil was raising production costs as well.
With U.S. inflation clearly being affected by the oil shock emanating from the Iran war, the Federal Reserve is likely to keep interest rates on hold. Traders have even increased their expectations of potential rate hikes later this year. Higher rates bode poorly for crypto, given that they increase the opportunity cost of investing in the sector.
The data also comes at a time of transition for the Fed, with incumbent chair Jerome Powell set to end his term on Friday. He will be replaced by Trump’s pick Kevin Warsh, who on Wednesday was confirmed by the U.S. Senate as the next Fed chief.
"The Powell-to-Warsh transition completes against an inflation regime in which the room for a dovish pivot has narrowed materially," Dessislava Ianeva, analyst at Nexo Dispatch, said.
U.S.-China summit eyed for more cues
Turning to the Middle East conflict, the U.S. and Iran remain at an impasse after Trump earlier this week said a ceasefire between the warring parties was on “life support” following his rejection of Tehran’s response to a U.S.-backed proposal aimed at ending the conflict and reopening the Strait of Hormuz.
The focus is now on Trump’s summit this week with counterpart Xi Jinping in China, where the two leaders are expected to discuss trade tensions, the Iran conflict, Taiwan, and global supply chains. Trump landed in Beijing on Wednesday to a red carpet greeting. The president will participate in an official state arrival ceremony on Thursday, after which he will meet with Xi and sit for multiple interviews.
This is the first visit by a sitting U.S. president to China since Trump’s own trip in 2017.
"China is potentially the offsetting force in the global risk picture. April exports rose 14% year-on-year against ~8% consensus, with technology leading despite chip restrictions. The CSI 300, China’s blue-chip equity benchmark, sits above its prior Trump 1.0 peak; 10-year CGB yields trade below 2%. Resilient growth and accommodative monetary conditions stand in sharp contrast to U.S. repricing," Nexo’s Ianeva said.
"The Trump-Xi summit is the binary swing factor: with rare-earths leverage and AI deployment capacity, Beijing arrives in a materially stronger position than in 2017. A constructive summit keeps risk supported; escalation exposes it to one-sided Fed pressure," Ianeva added.
Trump said that he will request Xi to open up the Asian nation to western businesses. Trump is also expected to discuss trade tariffs, Taiwan, and artificial intelligence with Xi. Close attention is also being paid to any mention of Iran, amid China’s status as a major importer of crude from the country.
Charles Schwab opens crypto trading to select retail investors
Elsewhere, Charles Schwab has begun offering direct cryptocurrency trading to retail clients, marking a significant expansion of the brokerage’s digital asset services.
An initial group of eligible retail investors can now buy and sell bitcoin and ether through its new platform, dubbed "Schwab Crypto," alongside other crypto-related products, the firm announced on Tuesday.
The phased rollout was flagged by the company last month. Schwab previously limited its crypto exposure to indirect products such as exchange-traded funds and derivatives.
Crypto price today: altcoins largely to the downside
Turning to broader crypto prices, altcoins were mostly lower, tracking Bitcoin.
World no.2 crypto Ether slipped 1.2% to $2,257.20, while world no.3 crypto XRP fell 1.5% to $1.4191.
Solana and Cardano shed 4% and 2.9%, respectively, while BNB gained 0.7%.
Among memecoins, Dogecoin rose 2.4%, while $TRUMP slid 9%.
See also: "Bitcoin ETFs Recorded the Largest Outflow in More Than 3 Months — Around $635 Million"
