Bitcoin and most altcoins crashed on Friday, erasing some of the gains made in the past two weeks. Cardano’s (ADA) price crashed to a low of $0.69, down 40% from its highest point this month.
Pepe (PEPE) dropped to $0.0000078, slightly down from this week’s high of $0.000009210. Other top laggards were Floki, Shiba Inu, and Curve DAO coins. After rising to $89,000 earlier this week, Bitcoin retreated below $84,000.
US Inflation Rose As Consumer Spending Slowed
The crash happened for two main reasons. First, the US published economic data that revealed that inflation remained high while spending cooled. The closely-watched core PCE data rose from 2.7% in January to 2.8% in February, while the headline figure rose to 2.5%.
At the same time, personal spending rose by 0.4%, missing the expected increase of 0.5%. This trend may continue as a report released earlier this week showed that consumer confidence has recently tumbled.
These numbers also account for the significant decline in US stock indices. The Dow Jones index crashed by 800 points, while the S&P 500 and Nasdaq 100 indices tumbled by 135 and 480 points, respectively, as fear spread in the market.
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Cardano (ADA), Pepe (PEPE), Floki (FLOKI), and Shiba Inu (SHIB) Declines Ahead of Trump’s Liberation Day
Bitcoin and altcoins like Cardano, Pepe, Floki, and Shiba Inu prices dropped as the market waited for Tuesday’s Donald Trump’s Liberation Day. On this day, the US is set to impose reciprocal tariffs on imported goods from most countries, which could intensify a trade war and potentially push the global economy into a recession.
Earlier this week, Trump announced that the US would impose a 25% tariff on imported cars and parts the following week. A 25% price increase is enormous, meaning many consumers will pause their spending.
On the positive side, a recession may lead to a higher unemployment rate and low inflation through the concept known as the Philips Curve. This theory states that inflation falls when the unemployment rate rises.
This, in turn, may lead the Federal Reserve to start cutting interest rates in the year’s second half. In a note, a Bloomberg analyst said:
“We anticipate that deteriorating consumer sentiment will negatively impact spending and growth moving forward. With the Fed on hold for now, they’ll likely need to cut rates in the second half of the year more quickly — and likely by more — than the latest dot plot shows they anticipate.”
Federal Reserve interest rate cuts, quantitative easing, and potential government stimulus could positively impact cryptocurrencies such as Cardano, Dogecoin, Shiba Inu, and Pepe coin.
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