Bitcoin drops below $82,000 after U.S. inflation hits 3.7%

Hotter-than-expected U.S. inflation data rattled risk assets on Wednesday, and crypto was among the first markets to feel it.

The Consumer Price Index (CPI), a government gauge of what Americans pay for everyday goods and services, rose 0.6% in September, according to the Bureau of Labor Statistics. That matched forecasts.

But annual inflation climbed to 3.7% from 3.4% in August, above the 3.6% economists expected.

Core CPI strips out volatile food and energy prices. It rose 0.3% on the month, against a 0.2% forecast. On an annual basis, it reached 2.6%, up from 2.4% in August.

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Rate-hike fears return

The data complicates the Federal Reserve's path. Before the release, Fed officials had signaled at least one more 25-basis-point hike before year-end, though forecasters were split on whether it would land in October or December.

The hot print could put an October hike back on the table.

Higher rates tend to weigh on speculative assets like crypto because safer investments such as bonds start paying more.

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Bitcoin slips back from $83,000

Bitcoin was trading around $83,800 before the data release. It dropped sharply below $82,000-mark, currently trading at $81,728 at the time of writing.