Bitcoin jumps to 9-month high as cryptos surge on key inflation data
- Bitcoin jumped 15% to $26,500 shortly after the CPI was released, hitting a nine-month high.
- Cryptos are up across the board as the market is valued at $1.1 trillion, per Messari.
- Ethereum is also on a tear, rising 7.5% in the last 24 hours.
Bitcoin jumped to a near nine-month high on Tuesday as traders pondered key inflation data that could bolster chances the Federal Reserve will slow rate hikes.
The rally follows the release of the consumer price index, which was in line with estimates to show continued cooling in inflation. The CPI rose 0.4% in February from January and was up 6% annually.
Bitcoin rose to $26,500 shortly after the print, rising over 15%. Bitcoin later pared some gains, according to Messari, trading up around 6%.
Although bitcoin is leading the rise, crypto markets are increasing across the board, with the industry’s value exceeding $1.1 trillion. Ethereum has also broken, jumping 7.5% in the last 24 hours.
Traders are speculating on the Fed’s next monetary tightening move as the much-anticipated FOMC meeting is set to start next week. The latest CPI reading cemented expectations that policymakers will raise interest rates by another 25 basis points and then stop after that.
That compares with earlier speculation that the Fed could hike by 50 basis points with more to follow. But the recent collapses of Silicon Valley Bank, Signature Bank and Silvergate Capital have since raised hopes of a smaller rise.
As federal regulators step in to stop depositors at SVB and Signature, the earlier fear that they might lose some of their money may have given the crypto a boost.
“Silicon Valley Bank meltdown has focused a lot of attention on the permissionless and autonomous nature of Bitcoin for storing savings. Combined with a low CPI print, the price of bitcoin is pulling retail into the crypto economy again,” Enrico Rubboli, CEO of blockchain scaling provider Mintlayer told Insider.
“Confidence in the banking sector has weakened among some investors who may find themselves moving towards alternative assets such as bitcoin, which have benefited greatly from this crisis,” Ahmed Negm, head of market research at multi-asset brokerage MENA at XS.com , shared in a statement with Insider.
Negm added: “Cryptocurrencies in general could see positive results while interest rate expectations softened compared to last week.”
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