Bitcoin Drops Below ₱4,198,189 ($70,000) as US PMI Signals Stagflation Risk
Bitcoin tumbled below ₱4,198,189 ($70,000) as fresh stagflation concerns gripped markets. The S&P Global flash composite PMI fell to 51.4 in March, signaling economic weakness paired with accelerating input costs at their fastest pace in 10 months.
Key Takeaway
Stagflation fears are back, and Bitcoin's response will test whether it's a hedge or just another risk asset.
US companies reported the fastest increase in input costs in 10 months, sending Bitcoin below ₱4,198,189 ($70,000) as traders absorbed fresh stagflation warnings. The S&P Global flash composite PMI dropped to 51.4 in March from 51.9 in February, while the services sector slowed to 51.1 from 51.7.
The stagflation threat comes from a toxic combination: slower growth paired with stubborn inflation. S&P Global said the survey data was consistent with just 1% annualized growth for the US economy, while price trends suggested inflation could be moving back toward 4%. Manufacturing ticked up to 52.4 from 51.6, but that wasn't enough to offset broader weakness.
Companies pointed to higher living costs, elevated borrowing costs, and war-related uncertainty as factors weighing on activity. Employment fell for the first time in more than a year. Treasury yields climbed after the release, reinforcing expectations that the Federal Reserve will keep interest rates higher for longer.
Bitcoin traders absorbed the news uneasily at what S&P Global called a pretty tense moment for global markets. The digital asset has shown mixed behavior during inflationary episodes — it dropped sharply alongside tech stocks during the Fed's aggressive 2022 tightening cycle, behaving more like a high-risk asset than an inflation hedge. But it surged roughly 80% in 2023 during the US banking crisis as capital fled traditional finance.
Some crypto bulls argue that Bitcoin could eventually benefit if confidence in the broader policy mix starts to erode. CryptoQuant Head of Research Julio Moreno said that in a stagflation environment, Bitcoin could initially trade choppy with risk assets, then potentially outperform as markets price in policy constraints, falling real yields, and stronger demand for scarce, non-sovereign stores of value. The PMI data arrived on Tuesday as the Federal Reserve faces its most difficult policy challenge in decades: cool inflation without triggering a recession.
This article was written based on reporting from CryptoSlate.
