Bitcoin (BTC) has seen a remarkable rise, jumping by $1,500 in just 24 hours to reach $98,500, a 2% increase. This surge follows the release of the U.S. Consumer Price Index (CPI) data for December, which revealed mixed inflation trends. The data from the U.S. Bureau of Labor Statistics (BLS) was released on January 15, 2025, showing a slight uptick in headline CPI, while core inflation showed signs of cooling.
According to the latest CPI report, the overall CPI increased by 0.4% month-on-month in December, slightly above the 0.3% rise recorded in November. The annual CPI was up 2.9%, matching analyst expectations. While inflation remains present, it has shown some signs of easing.
On the other hand, Core CPI, which excludes food and energy prices, climbed 0.2% month-on-month, as expected. However, the annual Core CPI saw a surprise drop to 3.2%, falling short of the anticipated 3.3% and the previous month’s 3.3%.
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Market Reactions: Bitcoin Eyes $100K
The mixed inflation data had a noticeable impact on the cryptocurrency market. Bitcoin capitalized on the dip in inflation, driving its value closer to the psychological $100,000 mark. Despite lingering concerns over high core inflation, the overall decrease in inflation helped push Bitcoin to its current price.
Ethereum Follows Bitcoin’s Lead
Ethereum (ETH), the second-largest cryptocurrency, saw a sharp 3% increase in the past hour, reaching $3,300. The rise in Ethereum’s value mirrored Bitcoin’s surge as investor sentiment improved following the CPI data release.
XRP also joined the upward trend, climbing by 2.6% to $2.57. Altcoins in general followed Bitcoin’s momentum, benefiting from the broader market rally.
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Cryptocurrency Market Capitalization Reaches New Heights
The total cryptocurrency market capitalization surged by 5.6%, reaching $3.33 trillion. This increase was driven by Bitcoin and Ethereum’s price growth, along with rising investor confidence. Daily trading volume also saw a significant jump, up by 25%, reaching $154 billion, according to CoinMarketCap.
Federal Reserve’s Focus On Core Inflation
Despite the overall CPI data showing a moderate increase, the Federal Reserve remains concerned about persistent core inflation. Core CPI, a key indicator for the Fed, has been steadily high, and this remains a focal point for policymakers as they consider future monetary policies. The rise in Bitcoin and other cryptocurrencies highlights how the market is reacting to inflation data, with investors seeking assets outside traditional financial systems.
As inflation data continues to shape market trends, Bitcoin’s surge toward $100,000 and Ethereum’s rise to $3,300 indicate that cryptocurrencies remain an attractive alternative for investors. The overall rise in the crypto market’s value reflects positive sentiment, though the Federal Reserve’s focus on core inflation could still pose challenges in the months ahead.
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