Bitcoin Rallies Following News on US Inflation Data for February
Bitcoin hit an upswing ahead of the Fed’s inflation-focused meeting on March 22nd to decide rate hikes.
The price of Bitcoin (BTC) climbed sharply on news that US inflation had met Dow Jones and Nomura estimates. In February, US inflation rose 0.4% month-on-month and 6% year-on-year as the Federal Reserve readies its next rate hike exercise.
Can Bitcoin Hit $30K on Momentum of Latest US Inflation Report
Bitcoin price soared after the US inflation report, pushing past the $25K threshold, and currently sits at $26,014.33. This development already has analysts and observers pondering the sustainability of BTC’s latest rally. In addition, reports also seem to ponder whether the prominent digital currency would rise substantially higher to hit $30K.
The Fed should announce its latest interest rate decision next week, with Chair Jerome Powell suggesting an increase in rates pace. However, some observers and analysts still hold out hope that the apex bank could ease up on its aggressive hikes. The projected reason is the crash of three banks, including Silicon Valley Bank (SVB).
February’s Consumer Price Index (CPI) data reflects that inflation experienced its lowest 12-month increase since September 2021. Furthermore, reports also stated that the release roiled conventional markets, while digital currency markets reacted positively. For instance, the leading altcoin Ether (ETH) also climbed noticeably and is changing hands at under $1,800.
The latest CPI report is the second one based on BLS’s new weighting system. Although CPI previously saw calculations using two years of expenditure data, the Index will become based on a single calendar year of data. Furthermore, this new calculation will also use consumer expenditure data from 2021.
Determined by the Bureau of Labor Statistics and used as an indicator of inflation, CPI measures the average price change over time. This change includes consumer prices for a basket of goods and services in a country. Furthermore, CPI reflects consumer spending patterns on food, transportation, housing, clothing, recreation, and medical care. The measure also plays a vital role in adjusting wages, benefits, and social security payments for inflation. In addition, CPI is used to measure economic performance and set monetary policy.
According to the US Labor Department’s statement, the shelter index contributed most to the monthly ‘basket’ increase. Shelter accounted for 70% of last month’s CPI increase, including indexes for food, recreation, and household furnishings.
CME Group Establishes Trading Opportunities for Bitcoin Futures Event Contracts
In other BTC-related news, the CME Group announced the commencement of event contracts trading on Bitcoin futures. Weighing in on the development, Tim McCourt, Global Head of Equity and FX Products at the derivatives trading platform, said:
“Our new event contracts on Bitcoin futures provide a limited-risk, highly transparent way for a wide range of investors to access the bitcoin market via a fully regulated exchange. These cash-settled, daily expiring contracts will further complement our existing suite of 10 event contracts tied to our benchmark futures markets, which have traded more than 550,000 contracts to date.”
Furthermore, McCourt added:
“In addition, these new contracts will offer an innovative, lower-cost way for investors to trade their views on the up or down price moves of bitcoin.”
The CME Group has played an early participatory role in the crypto space, launching the world’s first BTC futures contracts in December 2017.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.