Bitcoin, Ether Nurse Losses as U.S. Stagflation Fears Grip Market

Bitcoin and ether are experiencing losses as fears of U.S. stagflation grip the market. As Asia begins its business week, there are mixed bullish and bearish signals. The crypto markets are in the red, with Bitcoin trading near $62,400, down 2.5% in the last 24 hours, while Ether is down 3% at $3,200. The fear of stagflation, a period of high inflation and low growth, is impacting risk assets. The weaker-than-expected U.S. GDP print and higher Core PCE inflation index have raised concerns. The combination of slower growth and sticky inflation has reduced the likelihood of Fed rate cuts. However, Janet Yellen’s fiscal strategy utilizing Treasury General Account (TGA) assets and the Reverse Repurchase Program (RRP) could inject up to $1.4 trillion in liquidity, boosting risk assets. The U.S. Treasury’s quarterly refunding announcement, maintaining or reducing the TGA balance, is crucial for the bitcoin bull market. Additionally, the launch of bitcoin ETFs in Hong Kong is being closely watched, although mainland Chinese investors are unable to participate.