Stagflation Risks Prompt Concerns for Bitcoin as US Economic Data Shows Slower Growth and Rising Inflation

Key Points

1. The US Services PMI for July was 50.1, below expectations of 51.5, showing slower growth in the service sector and nearing contraction levels.

2. The employment index fell to 46.4, while the price index rose to 69.9, the highest since October 2022, signaling rising inflation pressures.

3. Stagflation concerns led to declines in major US stock indices (Dow Jones, S&P 500, Nasdaq) and a 1% drop in Bitcoin.

4. Market expectations for Federal Reserve rate cuts shifted from three to two this year, with potential further adjustments if stagflation signals strengthen.

5. Bitcoin has shown increasing sensitivity to economic data, with altcoins largely following its movements.