Bitcoin, the world’s largest cryptocurrency, rallied past the US$26,000 mark at 09:15 p.m. in Hong Kong, shortly after the release of the U.S. Consumer Price Index (CPI), which indicated a drop in annual inflation rate to 6% in February.
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- The inflation data was in line with the expectations of the market and a decrease from January’s rate of 6.4%. CPI rose 0.4% on the month, lower than 0.5% in January.
- Housing remains a big contributor to the index, accounting for over 70% of the monthly increase.
- Meanwhile, Bitcoin jumped 6.10% to soar past the US$26,000 mark, a level not seen since June 2022, according to CoinMarketCap data. Ether also enjoyed a bump, rising 4.57% to US$1,767.
- This increase in cryptocurrency prices boosted the total crypto market capitalization by 12.15% in the past 24 hours to US$1.14 trillion.
- Market analysts were previously predicting that the Federal Reserve would consider 50 basis point rate hikes at the next Federal Open Market Committee meeting scheduled for next week. However, recent events have changed expectations regarding interest rates.
- The failures of Silicon Valley Bank and Signature Bank over the past weekend have caused many market watchers to revise their predictions. Some analysts even believe that the Fed may decide to leave rates unchanged.
- “While a 50 basis point interest rate hike was seen as increasingly possible last week, U.S. bank issues have shifted expectations toward lower raises,” Ahmed Negm, head of market research at trading platform XS.com, said in a statement.