Bitcoin takes a hit on interest rate hike fears

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Bitcoin was trading around $43,000 on Friday morning, after surging above $45,000 in the day on Thursday.

The cryptocurrency behaves much like the stock market, reacting to inflation figures and concerns about rising interest rates.

Bitcoin heads into Friday after pulling off a three-day winning streak.

Bitcoin is up over 13% month-to-date, but down over 5% year-to-date.

Bitcoin reacted Thursday to Wall Street’s retreat on news that US inflation jumped 7.5% in January, raising expectations that the Federal Reserve will need to act forcefully to cool the economy by increasing interest rates.

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St. Louis Federal Reserve Chairman James Bullard suggested rates should be one percentage point higher by July.

The S&P 500 fell 1.8% to 4,504.08, with more than 85% of its shares ending lower after another day of sharp swings. The Dow Jones Industrial Average fell 1.5% to 35,241.59 and the Nasdaq composite slipped 2.1% to 14,185.64.

Ether, the second-largest cryptocurrency by market cap, was trying to rebound Friday morning after falling 4% in Thursday’s session.

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Bitcoin trading volume trended higher and was generally higher than a week ago, based on data compiled by CoinDesk.

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