Bitcoin (BTC) has experienced a significant drop, with its price falling to $92,565.77, representing a 6.5% decline over the past seven days, according to data from CoinGecko. This downturn comes as global markets digest a slew of economic data and brace for upcoming reports on inflation and unemployment in the United States.

Inflation Fears Renewed After Robust Jobs Data

In its latest market analysis, QCP Capital highlighted renewed fears of inflation following a scorching U.S. nonfarm payroll (NFP) report, which recorded 256,000 new jobs compared to an expected 164,000. 

The strong labor market data, coupled with rumors of reinstated Trump-era tariffs, has fueled speculation about potential inflationary pressures. Equities markets have responded negatively, with indices slipping amid diminishing hopes for imminent Federal Reserve rate cuts.

For now, Bitcoin has managed to hold critical support levels at $91,000, while Ethereum is hovering above $3,100. Despite macroeconomic turbulence and lingering concerns tied to the Silk Road-linked Bitcoin wallet activity, implied volatility (IV) in the crypto market remains subdued, with a slight put-skew reflecting cautious investor sentiment.

Upcoming Economic Data Could Test Crypto's Role as Inflation Hedge

Investors are eyeing this week’s economic calendar, which includes Producer Price Index (PPI) data on January 14, Consumer Price Index (CPI) data on January 15, and unemployment claims figures on January 16. These reports could provide further insights into the state of the U.S. economy and trigger price action in the crypto market.

“Crypto isn’t out of the woods just yet,” QCP Capital noted, warning that the broader macroeconomic landscape remains challenging. The sector may face a "real test" in proving its value as an inflation hedge amid these headwinds.

Speculation on Crypto ETFs Under the Trump Administration

The cryptocurrency industry is also abuzz with speculation about regulatory changes under the Trump administration, particularly concerning crypto exchange-traded funds (ETFs). 

Nate Geraci, a prominent ETF industry commentator, predicts significant developments in the sector. He foresees the approval of spot Bitcoin and Ether ETFs, potentially with advanced features such as staking and in-kind redemption. 

Niche ETFs focused on companies adopting Bitcoin as a core treasury asset could also launch, along with broader industry index funds from firms like Grayscale and Bitwise. The approval of spot Solana and XRP ETFs may also be on the horizon.

Geraci expects the incoming administration, led by crypto-friendly policymakers such as Paul Atkins, to move swiftly in providing clarity on the regulatory classification of digital assets. This regulatory certainty could enable a wave of innovation, making 2025 “The Year of Crypto ETFs.”