Bitcoin fell toward USD 80,000 on Thursday as hotter U.S. inflation data triggered losses across cryptocurrencies and global stock markets. The sell-off followed Wednesday's consumer price report, which increased expectations of another Federal Reserve interest rate hike.
Meanwhile, technology stocks declined, crypto liquidations approached USD 1 billion, and Bitcoin exchange-traded funds recorded fresh outflows. The broader retreat reflected growing concerns about borrowing costs and reduced demand for riskier investments.
Bitcoin briefly approached USD 80,000 during early Asian trading before recovering toward USD 81,500. However, the rebound weakened near USD 81,000 as selling pressure continued. The cryptocurrency lost more than 2% over 24 hours, according to market data.
Its decline followed Wednesday's U.S. Consumer Price Index report, which showed that inflation accelerated in September. Annual headline inflation reached 3.7%, up from 3.4% in August. The reading also exceeded economists' expectations, raising fresh concerns about persistent price pressures.
Meanwhile, core inflation, which excludes food and energy, increased to 2.6% from 2.4%. Rising energy costs contributed to the headline increase, while stronger core inflation raised concerns about broader price pressures.
Following the release, traders adjusted their expectations for the Federal Reserve's October meeting.
Polymarket showed the probability of an October rate hike briefly approaching 50% before declining toward 30%. Similarly, CME FedWatch indicated that the probability climbed from approximately 22% to 47% before easing to 26%.
Despite those changes, markets continued to favor an October hold. However, December rate hike expectations remained elevated, with traders assigning roughly 70% odds to another 25-basis-point increase.
The inflation report also affected institutional investment flows as traders reduced exposure to digital assets. U.S. spot Bitcoin ETFs experienced renewed selling pressure on October 14. Giottus CEO Vikram Subburaj cited USD 150.5 million in net outflows, reversing the previous day's USD 175.7 million inflow.
Separately, another reported SoSoValue figure placed Wednesday's outflows at USD 261.5 million. Both figures indicated a reversal in fund flows, although the reported totals differed. Meanwhile, CoinGlass data showed approximately USD 966.2 million in cryptocurrency liquidations over 24 hours. Long positions accounted for most forced closures as declining prices affected leveraged traders.
The sell-off extended beyond Bitcoin. Ether dropped 5.7% to approximately USD 2,360.53, while XRP declined 4.7%. Solana fell 4.8%, Cardano lost 6%, and BNB declined 3.5%. Similarly, Dogecoin shed 5.6%, while the TRUMP token dropped 7%.
PYTH stood apart from the broader losses, gaining more than 7% among the 100 largest cryptocurrencies.
Read More; Bitcoin Slips Near USD 81,150 as Hot US CPI Sparks USD 1B Liquidations
Traditional financial markets also weakened as investors reacted to the inflation figures and changing interest rate expectations.
Nasdaq futures declined 1%, extending Wednesday's 2% sell-off. Meanwhile, South Korea's KOSPI plunged 8%, triggering circuit breakers amid sharp market losses.
Technology and artificial intelligence stocks faced selling pressure as investors reassessed future earnings against the prospect of higher borrowing costs. Market-making firm STS Digital warned that uncertainty surrounding the Federal Reserve's next decision could reduce market liquidity and weaken demand for risk assets.
Its representative, Anderson, nevertheless expected the Fed to leave rates unchanged in October. That view matched the greater than 70% probability of a hold reflected in CME futures.
Meanwhile, higher interest rates can increase the appeal of interest-bearing investments compared with cryptocurrencies, which generally do not provide guaranteed returns. The market response also reflected concerns about energy prices, bond market volatility, and technology stock valuations.
Bitcoin's decline toward USD 80,000 followed stronger U.S. inflation, rising rate hike expectations, and renewed institutional selling. Nearly USD 1 billion in crypto liquidations accompanied losses across major digital assets and global equities. The Federal Reserve's October decision remains a central focus as markets reassess inflation and borrowing costs.