Bitcoin Price Climbs Following CPI Inflation Data – Implications for Cryptocurrency Markets

Bitcoin, the largest and most widely recognised cryptocurrency, experienced a notable rise early Wednesday as markets digested the latest U.S. inflation figures. Over the past 24 hours, Bitcoin gained 2.9%, trading at $99,032 according to CoinDesk. This marks a significant surge of over 40% since 5 November, coinciding with President-elect Donald Trump’s re-election, which has fuelled optimism about potential crypto-friendly regulatory policies.

However, the recent upward trend in cryptocurrencies has faced challenges amid investor concerns that the Federal Reserve may maintain higher interest rates for an extended period. Elevated borrowing costs tend to weigh on riskier assets like cryptocurrencies, as they reduce the appeal of speculative investments.

The U.S. Bureau of Labor Statistics released the December Consumer Price Index (CPI) report on Wednesday, showing annual inflation at 2.9%. While this figure exceeded expectations of 2.8%, it remains well above the Federal Reserve’s 2% target. Notably, core inflation—which excludes volatile energy and food prices—showed a decline. Following the report, futures markets began to reflect an increased likelihood of interest rate cuts in the coming months, a development that is generally seen as favourable for cryptocurrency investors.

In the broader cryptocurrency market, other digital assets also demonstrated strong performances. XRP surged 15%, buoyed by optimism surrounding the ongoing legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC). Ripple operates the payment network that utilises XRP as its native currency.

Ethereum (ETH) rose by 4.4%, while Solana (SOL) and Dogecoin (DOGE) both climbed by 5.4%. These gains highlight the growing momentum across the crypto sector as inflation data and monetary policy expectations shape market sentiment.