Bitcoin rose above $ 45,000, after first falling more than $ 1,700 on Thursday, following news that U.S. inflation climbed again in January to 7.5% and stayed at a 40-year high.
The cryptocurrency BTCUSD, +1.13% was trading at around $ 44,938 late morning, up 2.4% over the past 24 hours.
The U.S. rate of inflation climbed again in January to 7.5% and stayed at a 40-year high, suggesting upward pressure on consumer prices is unlikely to relent soon and putting more pressure on the Federal Reserve to act.
“Investors will be looking for any sign that price pressures are easing as we near what many believe to be peak inflation over the next couple of months,” Craig Erlam, senior market analyst at OANDA wrote in a Thursday note.
The market has been eyeing the inflation report as an indication of how aggressive the Federal Reserve will be in tightening monetary policy, with the central bank expected to begin a series of interest-rate increases starting at its next meeting in March.
Meanwhile, crypto investors have been watching the correlation between bitcoin and technology stock prices.
Some bitcoin supporters touted the cryptocurrency as a store of value and an inflation hedge. However, for the past few months, the cryptocurrency has often traded in tandem with tech stocks.
Bitcoin’s decoupling from tech stocks would be “an extremely encouraging sign” for the asset to recover from this year’s losses, bitcoin company NYDIG wrote in Wednesday notes.
The Nasdaq Composite COMP, -0.65% fell 0.5% to around $ 14,423Thursday morning.