Bitcoin, Ethereum, and other major cryptocurrencies experienced a significant surge following the release of the latest U.S. inflation data, which showed a smaller-than-expected increase in prices. According to the Consumer Price Index (CPI) for March, inflation rose by just 2.4% year-over-year, below the anticipated 2.6%. Core CPI, which excludes volatile food and energy prices, increased by 2.8%, down from 3.1% in February. This data provided much-needed relief to financial markets, including the cryptocurrency sector.
Bitcoin saw a notable 7.5% increase, climbing to $82,000, while Ethereum surged to $1,600. Solana also posted an 11% gain, reaching around $114. The inflation data boosted investor confidence, contributing to gains across a range of digital assets.
The positive market reaction follows another significant development: President Donald Trump’s decision to delay tariff hikes for 90 days. This move alleviated some of the trade-related uncertainties that had previously been weighing on the markets. Trump had previously imposed higher tariffs on Chinese goods and increased levies on foreign cars and auto parts, stoking concerns over escalating trade tensions. However, the temporary suspension of certain tariffs helped calm fears of a potential economic slowdown, further supporting market sentiment.
Despite this, Trump also raised tariffs on Chinese imports to 125%, signaling a continued hardline stance on trade with China. The Federal Reserve has been closely monitoring both inflation trends and the effects of tariffs. While inflation has shown signs of slowing, it remains above the central bank’s 2% target, with the latest data marking the second consecutive month of declining inflation and core inflation.
The drop in inflation has sparked optimism across markets, with investors speculating that it could prompt the Federal Reserve to adopt a more dovish approach, potentially including interest rate cuts in the future. Analysts are keeping a close eye on upcoming CPI reports to assess the ongoing impact of tariffs and inflation trends.
The March inflation report revealed a sharp decline in prices, despite the ongoing tariff increases, offering a sense of relief to investors. The better-than-expected inflation figures, combined with the pause in some tariff hikes, have provided support for both equities and cryptocurrencies.
Bitcoin’s price hovered around $82,000, reflecting a 7.5% increase over the past 24 hours, while Ethereum saw an 11% rise. The broader market also benefitted from the news, although the Federal Reserve’s next steps remain uncertain. The latest inflation data signals potential changes in inflationary trends, while trade tensions with China continue to shape investor sentiment.
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