Increasing odds of interest rate hike and CPI surge drag down cryptocurrency markets

Bitcoin briefly traded above $45,000 on Thursday as the U.S. Labor Department reported a CPI of 7.5% for January, which rattled the U.S. equities markets and sent major cryptocurrencies into freefall.

James Bullard, President of the Federal Reserve bank of St. Louis said he supported hiking interest rates by 1% by July in response to the CPI increase.

The news put strong downside pressure on U.S. stocks, which also dragged bitcoin down under $44,000. During the Asian trading session, bitcoin traded as low as $43,000.

The drop in bitcoin prices also translated to steep declines for other major cryptos like ether, which declined more than 5% from the daily highs of $3258.