Bitcoin rebounded to almost $70,000 on Wednesday following the release of the May Consumer Price Index (CPI) data, which came in cooler than expected. Other leading cryptocurrencies also nudged higher as the market reacted positively to the news.
CPI Fuels 4.7% Bitcoin Jump
The Consumer Price Index (CPI) increased 3.3% year-over-year in May, the U.S. Bureau of Labor Statistics said Wednesday, coming in slightly below economists’ forecast of 3.4%. The softer inflation data relieved investors and fueled market participants’ expectations of rate cuts.
Bitcoin (BTC) welcomed the inflation read, jumping to as high as $69,945, up nearly 5% over the past 24 hours. BTC settled at $69,665 at publication time, according to CoinGecko. Ethereum, the industry’s second-largest crypto, has gained 4.9% on the day. Other cryptocurrencies including Solana (SOL), Ripple’s XRP, and Dogecoin (DOGE), Shiba Inu have rallied 8.7%, 4.8%, and 11%, respectively.
U.S. economic data has affected crypto prices in recent months. For example, hotter-than-expected inflation figures pulled Bitcoin from historic highs above $74,700 in March to sub-$58K levels in May.
Analysts believe looser monetary conditions will turbocharge the benchmark cryptocurrency’s price to new all-time highs. However, despite the promising CPI print, the U.S. Federal Reserve is expected to keep interest rates unchanged during the forthcoming FOMC meeting.
Notably, several key central banks globally have already begun slashing benchmark rates, with the European Central Bank and Bank of Canada lowering rates last week.
With U.S spot Bitcoin ETF buying slowing and even going net negative on some days, macroeconomic factors will likely continue to shape the near-term trajectory of cryptocurrencies. On June 11, investors pulled out $200 million from the ETF instruments, the highest net outflows in a single trading day since May 1 — which saw net record-breaking outflows of $564 million.
