Bitcoin's value, which was close to $74,000 early Thursday, dropped together with major stocks after the release of high U.S. inflation data. The cost of Bitcoin fell when it was found that inflation in February was higher than expected. The value of the largest digital currency by market cap decreased almost 3% within 24 hours, reaching $70,920 per coin as per CoinGecko. Bitcoin had reached a new record peak just above $73,700 overnight.

Recently published data from the Bureau of Labor Statistics within the Labor Department unveiled that the producer price index rose by 0.6% the prior month, surpassing the predicted 0.3%. This signifies that inflation is still a persisting concern. The index signifies alterations in prices post-manufacture, being a significant guidepost for inflation. Initially, stock prices were relatively stable, but subsequently decreased. The S&P 500 dropped by 0.2%, while the Nasdaq, focusing on technology, saw a nearly 0.2% decrease. Simultaneously, the Dow Jones Industrial Average also witnessed a 0.3% decrease. Tech stocks and other equities in the U.S., being deemed "risk assets," are prone to decreasing in value amidst significant inflation data, paralleling the shift seen with cryptocurrencies.

Investors hold expectations that the Federal Reserve will initiate interest rate cuts by May; however, this might not occur if inflation remains a persistent issue in the world's largest economy. Some analysts have emphasized that if the interest rates decrease, the price of Bitcoin could soar higher. The approval of spot Bitcoin exchange-traded funds (ETFs) back in January has fueled heightened interest and value in the crypto market and Bitcoin, enabling investors to engage with the cryptocurrency without physically possessing it.