Markets
Bitcoin Soars Past $69,000 After Flat US CPI Data
Bitcoin price surpassed $69,000, reaching new heights after the latest US Consumer Price Index (CPI) report for May showed a slight decline in inflation. The data exceeded the expectations of many experts, triggering a positive response from the cryptocurrency market and raising hopes for future adjustments in monetary policy.
CPI data: a pleasant surprise
The US Bureau of Labor Statistics released the May CPI data, revealing a decrease in inflation that caught many by surprise. According to the report, the US overall CPI fell to 3.27% year-on-year in May from 3.36% in April.
Core CPI, which excludes food and energy, fell from 3.62% to 3.41% year on year, marking the lowest underlying inflation rate since April 2021.
Charlie Bilello, chief market strategist at Creative Planning, highlighted that the U.S. inflation rate has declined significantly since its peak of 9.1% in June 2022. He attributed this decline to lower inflation rates in several sectors, including used cars, gas services, clothing, food, gasoline, medical care, fuel oil, shelter and electricity.
The rapid rise of Bitcoin
After the release of the CPI data, the price of Bitcoin experienced a sharp increase. Within an hour, BTC rose more than 2% to reach a high of $69,377. This rapid movement underlines Bitcoin’s sensitivity to macroeconomic indicators and its status as a leading global macro asset.
Mike Alfred, board member at IREN Energy, commented on Bitcoin’s ability to anticipate and react to macroeconomic factors. He stated: “Bitcoin already knows that CPI + Fed will not be major bearish catalysts. It is a highly intelligent global macro asset that prices almost everything in advance.”
Meanwhile, Jesse Cohen, global markets analyst at Investing.com, suggested the CPI report could encourage the Federal Reserve to consider future rate hikes. He noted that it would likely take several more favorable inflation reports before the Fed would consider cutting rates.
Market reaction and future expectations
The CPI data not only halted Bitcoin’s recent decline but also spurred a significant recovery. Data from Cointelegraph Markets Pro and TradingView showed that the price of Bitcoin rose to $69,636 on Binance shortly after the data was released.
Financial commentator Tedtalksmacro expressed optimism, suggesting that the CPI data could allow Federal Reserve Chairman Jerome Powell to consider easing financial policies. Michaël van de Poppe, founder and CEO of MNTrading, pointed to a significant drop in US dollar and Treasury yields, indicating market expectations for potential rate cuts.
As the market prepares for the upcoming Federal Reserve meeting and decisions on interest rates, Bitcoin price volatility is expected to continue. The Fed’s policy decisions in response to ongoing economic data will be closely monitored by investors.
Bitcoin’s recent rise above $69,000 highlights the cryptocurrency’s responsiveness to macroeconomic indicators and its role as a global macro-asset. The CPI data, which shows an unchanged index for May and a slight year-on-year decline, set the stage for potential changes in monetary policy, with market participants anxiously awaiting further developments. As the economic landscape evolves, Bitcoin price movements will continue to reflect broader market sentiment and expectations.
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