The Impact of US CPI Report on Crypto Market
The US Bureau of Labor Statistics (BLS) reported a decrease in the annual inflation rate to 3.2% in October, signaling a slowing in inflation and triggering a rebound in the crypto market with BTC price surging from $36K zone.
US CPI Comes In Softer Than Expected
In October, US inflation showed a general slowdown, marking a positive step for the Federal Reserve in its extended effort to control price increases. The core consumer price index, which omits food and energy prices, rose by 0.2% from September, reflecting underlying inflation trends. This moderation was influenced by lower gasoline prices, helping to keep overall inflation in check.
Consumer prices rose by 3.2% compared to the same month last year, slightly below economists’ expectations. Excluding food and energy, the “core” prices saw a 4.0% rise, also showing a modest slowdown from the previous month’s figures.
The BLS said in the press release, “The index for shelter continued to rise in October, offsetting a decline in the gasoline index and resulting in the seasonally adjusted index being unchanged over the month. The energy index fell 2.5% over the month as a 5.0% decline in the gasoline index more than offset increases in other energy component indexes.”
Following the news, the US Dollar experienced a sharp decline in value while the yield on the benchmark 10-year US Treasury bond saw a significant drop of nearly 3.1% on the day.
Bitcoin Shows A Positive Momentum
Following the news, BTC price made a solid rebound from the low of $36,200. The lowering inflation rates can increase investor confidence, leading to more investments in riskier assets like cryptocurrencies. Bitcoin is increasingly viewed as ‘digital gold,’ a hedge against inflation, and a store of value.
With Bitcoin hovering around the $37,000 mark for the past few days and initial excitement surrounding potential approval of a spot bitcoin ETF declining, investors bullish on Bitcoin are now turning their attention to the latest CPI report.
Hot Take: Crypto Market Rebounds Following US CPI Report
The crypto market has seen positive momentum following the release of the US CPI report showing a decrease in annual inflation rate to 3.2%. This signifies a slowing in inflation and has triggered a rebound in Bitcoin prices. With lower inflation rates potentially increasing investor confidence and leading to more investments in cryptocurrencies, Bitcoin’s value is expected to rise further as it is increasingly seen as a hedge against inflation and store of value.
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