Bitcoin gained over 1.5% in the first 35 minutes after the U.S. Bureau of Labor Statistics reported that the annual inflation rate in the U.S. rose 4.9% in April, the slowest gain in two years and indicating interest rate hikes by the Federal Reserve are working.
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Fast facts
- Prices of Bitcoin, the world’s largest cryptocurrency, peaked at US$28,292 about 35 minutes after the Consumer Price Index (CPI) report was released. Bitcoin traded for US$28,176 as of 9:30 p.m. in Hong Kong, according to CoinMarketCap data.
- Most major cryptocurrencies followed Bitcoin’s lead, with Ethereum rising to US$1,885, a 1.78% increase in the first 35 minutes after the announcement.
- April’s annual inflation rate, which stood just a little lower than 5% in March, boosted prices of both leading tokens to their highest since Monday. Both Bitcoin and Ethereum blockchains have been experiencing network congestion and higher transaction fees due to the rising popularity of memecoins.
- Pepe, the world’s 58th largest cryptocurrency by market capitalization and the token at the forefront of the recent memecoin rally, changed little to trade at around US$0.000001891 after the latest inflation data was released.
- The U.S. Federal Reserve is set to meet on June 14 to discuss the interest rates, currently between 5% and 5.25%.
- The Fed aims to bring the inflation rate to 2%, and CPI is a key indicator used by the bank to gauge inflationary pressures.
- Other factors, such as economic growth and employment data, also play a role in the Fed’s decisions on rates.
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