Shares of cryptocurrency exchange Coinbase fell 2% on Thursday after the Consumer Price Index showed inflation continued to increase in September beyond Wall Street’s expectations. The stock had fallen as much as 12.7% earlier in the day.
Bitcoin and other stocks tied to the success of crypto felt the pain, too. Riot Blockchain, Marathon Digital Microstrategy and Block (formerly Square) all saw shares drop Thursday morning, though they rebounded later, with most even turning slightly positive.
The broader markets were also trading lower on the fresh inflation read from the Bureau of Labor Statistics. But crypto stocks saw steeper falls than major indices like the Nasdaq Composite and S&P 500, which also fell on the inflation data but turned positive later in the day.
In recent months, an increase in inflation has been followed by volatility on Wall Street. That’s because more disappointing news on inflation means the Federal Reserve may implement larger interest rate hikes, further slowing economic growth.
Thursday’s CPI data likely cements consecutive 0.75 percentage point rate hikes in November and December. That diminishes investor’s appetites for riskier assets, like cryptocurrencies and crypto-related equities.