Bitcoin Tumbles Below $59K Amid Inflation Worry, Regulatory Onslaught on Crypto
2024-10-11

Cryptocurrencies continue to face headwinds on a number of fronts, with Thursday bringing a faster-than-hoped inflation report for September and yet another U.S. government regulatory action against a sector participant.
In mid-afternoon U.S. trading, bitcoin {{BTC}} was lower by about 4% over the past 24 hours. At $59,000, the price has returned to levels not seen since the U.S. Federal Reserve unexpectedly slashed its benchmark interest rate by 50 basis points in mid-September. Altcoins outperformed somewhat, with the broad-based crypto benchmark CoinDesk 20 Index declining just under 3% during the same period. Ether {{ETH}} dropped 3.5%, while only decentralized exchange Uniswaps's token {{UNI}} had positive return during the day on news about the platform's own layer-2 plans.
Crypto began the day on a weak foot after the U.S. Consumer Price Index report showed an unexpected re-acceleration of inflation in September. The news seemingly drove a stake through any idea that the Fed could cut interest rates another 50 basis points in November, with some market participants now wondering if the U.S. central bank might even decide to pause its rate-cutting cycle at that meeting.
Prices dived even lower during afternoon hours following news that the U.S. Securities and Exchange Commission (SEC) sued major digital asset market maker Cumberland DRW, raising concerns once again about the challenging regulatory environment for U.S. crypto firms. The SEC alleged DRW traded crypto assets that were sold as securities without registering as a securities dealer.
Cumberland pushed back against the lawsuit in an X post, saying that "we are not making any changes to our business operations or the assets in which we provide liquidity as a result of this action by the SEC."
The SEC lawsuit was only the latest regulatory action by the U.S. government against crytpo this week. On Wednesday, the Department of Justice charged four market makers and more than a dozen individuals over market manipulation charges. Also Wednesday, SEC Chair Gary Gensler was very dismissive about the idea that bitcoin or crypto might catch on in any sort of significant way as a means of payment. He called out the crypto industry for being filled with "fraudsters," and asserted that the "leading lights" of the sector were either in jail or soon to be on their way behind bars.