Bitcoin price rises after the U.S. Bureau of Labor Statistics released its latest Consumer Price Index (CPI) report, which shows a ninth consecutive month of falling in March.
The latest CPI report indicates that Bitcoin’s price is rising as consumer prices grew 0.1% on a seasonally adjusted basis in March, after a 0.4% increase in February.
The annual inflation rate was 5%, down from 6% in February and lower than the market expectations of 5.2%.
The U.S. inflation rate has been declining since June 2022, when the U.S. Federal Reserve started to raise the federal funds rate to combat inflation.
The CPI report boosted the crypto market, with the total market capitalization rising to $1.23T on Wednesday.
Bitcoin (BTC), the leading cryptocurrency, was trading above $30,000, up 0.80% after the CPI data came out.
Gold traded at $2,021 per ounce, up 0.81%, while silver traded at $25.60 per ounce, up 1.82%.
The CME Fedwatch tool indicates a 67.5% probability of a 25-basis-point rate hike by the Fed in May, while 32.5% of market participants predict no change in interest rates.
Economists predict the Fed may halt or reverse its tightening cycle due to significantly dropping inflation rates, which peaked at 9% in June 2022 and are currently far from the Fed’s 2% target.
The Fed’s monetary policy has been one of the main factors influencing the crypto market in recent months. Along with other factors such as institutional adoption, regulatory developments, and technical trends.
Not everyone agrees with this outlook, though. Economist and gold bug Peter Schiff, believes that high inflation is here to stay and that the U.S. will not see sub-2% inflation again.
Schiff commented on the CPI report on Wednesday and said that it was the reason for gold’s price jump.
Peter Dunn, CEO of Your Money Line, stated that people should feel positive about the latest CPI data, which shows lower inflation. He emphasized that this means increased purchasing power and less pressure on wages and interest rates
The CPI data was seen as a “great inflation print” for risk-on bulls, as it showed a moderate increase in consumer prices without triggering fears of runaway inflation or aggressive Fed action.
