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Bitcoin Retreats as Hot CPI Data Sparks Risk-Off Sentiment

Bitcoin and major cryptocurrencies decline following higher-than-expected US inflation data, while Goldman Sachs boosts crypto ETF holdings and Trump-linked WLF unveils a token reserve.
Published on 2025-02-12

Bitcoin Slides on Inflation Concerns

Bitcoin dropped 1.9% to $95,340 following the release of hotter-than-expected January CPI data. The Consumer Price Index rose 0.5% month-over-month and 3.0% annually, exceeding forecasts. Core CPI also surpassed expectations, climbing 0.4% monthly and 3.3% yearly. Federal Reserve Chairman Jay Powell indicated that further rate cuts are unlikely, potentially leading to rate hikes in 2025. Higher interest rates could dampen risk appetite, making non-yielding assets like Bitcoin less attractive.

Trump-Linked WLF Announces Token Reserve

World Liberty Financial (WLF), a crypto firm with ties to President Trump, launched a strategic token reserve to support cryptocurrencies like Bitcoin and Ethereum. The reserve aims to manage volatility, back DeFi projects, and build capital. WLF plans to collaborate with financial institutions to expand its tokenized assets. Trump also recently introduced a meme-based cryptocurrency, $TRUMP, ahead of his inauguration.

Goldman Sachs Expands Crypto Exposure

Goldman Sachs significantly increased its stakes in Bitcoin and Ethereum ETFs in Q4 2024. Holdings in Ethereum ETFs surged 2,000% to $476 million, focusing on BlackRock’s iShares Ethereum Trust and Fidelity’s Ethereum Fund. Bitcoin ETF investments grew 114% to $1.52 billion, with major allocations to iShares Bitcoin Trust and Fidelity’s Origin Bitcoin Fund. The firm exited positions in several other Bitcoin ETFs.

Altcoins Decline Across the Board

Most altcoins mirrored Bitcoin’s downward trend. Ethereum fell 2.7% to $2,584.79, while XRP dropped 3.1% to $2.37. Solana and Polygon declined 3.7% and 3%, respectively, with Cardano down 3.5%. Meme tokens also suffered losses, with Dogecoin slipping 2.4% and $TRUMP tumbling 5.4%. The broader crypto market remains cautious amid economic uncertainty.

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