New York: Bitcoin rebounded on Friday as investors considered the U.S. Federal Reserve's interest rate outlook following this week's subdued inflation data releases. Bitcoin rose 1.6% to $104,014.5 by 01:50 ET (05:50 GMT), maintaining support above the critical $100,000 level.
According to Azeri-Press News Agency, the cryptocurrency market remained cautious, particularly after Coinbase Global announced it might suffer a financial loss of up to $400 million due to a cyberattack. The attack compromised data from a limited number of customer accounts, leading to a 7.2% drop in Coinbase's share prices on Thursday. The company assured that affected customers who were misled into transferring funds would be reimbursed.
The recent U.S. inflation data played a significant role in influencing market sentiment. Producer prices unexpectedly declined in April, marking the sharpest drop in service costs since 2009. Earlier, softer-than-expected consumer price index data eased concerns about inflationary pressures. This environment of lower inflation and potential interest rate cuts typically weakens the U.S. dollar, making assets like Bitcoin more attractive to investors.
However, the market's optimism was tempered by concerns over a potential reacceleration of inflation due to ongoing tariff risks. A dovish stance by the Fed generally increases risk appetite, directing investor interest toward higher-yielding and speculative assets, including cryptocurrencies.
In the altcoin market, most tokens remained stable after a turbulent week. Ether, the second-largest cryptocurrency, rose by 0.8% to $2,588.45. In contrast, XRP, the third-largest cryptocurrency, fell by 3% to $2.4243. Solana showed little movement, while Cardano and Polygon experienced slight declines of 0.2% and 0.6%, respectively. Among meme tokens, Dogecoin decreased by 0.3%, whereas $TRUMP rose by 1.1%.