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The price of Bitcoin (BTC), the leading cryptocurrency, topped the $64,000 level earlier this Wednesday.
This came after the most recent consumer price index (CPI), which was released by the United States Department of Labor earlier today, dipped to 3.4% on a year-over-year basis. This is in line with analysts' expectations, which explains why the price of the largest cryptocurrency experienced a substantial price increase. That said, a lower CPI reading would probably have triggered a more powerful price spike.
Rent and gas are currently the main drivers of inflation, contributing more than 70% of April inflation.
Traders on index swaps are now leaning toward a faster pace of rate cuts after the most recent CPI data. The Federal Reserve is expected to decrease borrowing costs in September and December.
Alex DovbnyaA looser monetary policy will, of course, positively affect risk assets like Bitcoin. Last month, as reported by U.Today, the largest cryptocurrency experienced a severe drop after U.S. inflation turned out to be hotter than expected. Bitcoin prices started dropping lower due to mounting stagflation fears, with JPMorgan boss Jamie Dimon claiming that the state of the U.S. economy reminded him of the 1970s.
However, Fed Chair Jerome Powell was quick to shut down these stagflation concerns, which injected some confidence into the markets.
U.S. stock futures have also jumped following the inflation data, with the S&P 500 futures adding 26 points.
Vladislav Sopov
U.Today Editorial Team
Dan Burgin