Bitcoin jumps above $99,000 as US inflation ticks up

In December 2024, US inflation rose by 0.4%. Year on year, the CPI increased by 2.9%.

Core inflation excluding food and energy rose 3.2% year on year and 0.2% month on month.

Services prices excluding shelter and energy increased by 0.3%.

The data published by the US Bureau of Labor Statistics (BLS) matched analysts’ expectations.

“Today’s consumer price index may help the Fed feel a little more restrained. It will not change expectations of a pause this month, but should temper some of the talk of a possible rate increase. […] Judging by the market’s initial reaction, investors seem to have felt relief after several months of firmer inflation readings,” said Morgan Stanley Wealth Management chief economist-strategist Ellen Zentner.

PGIM Fixed Income’s chief US economist Tom Porcelli also believes the December figures eased investors’ fears of an inflation pickup.

“This is exactly, I think, what we needed,” PGIM Fixed Income chief US economist Tom Porcelli says on the December CPI report, adding: “We’re really close to getting toward neutral.” pic.twitter.com/q7qRSqKoZe

— Yahoo Finance (@YahooFinance) January 15, 2025

“I think this is exactly what we needed. […] We are really close to getting toward neutral,” he noted in an interview with Yahoo Finance.

MN Trading founder Michaël van de Poppe noted that CPI and the PPI showed a slight deviation from expectations.

Core CPI slightly lower than expected, after PPI being significantly lower yesterday than expected.

Yields & $DXY showing weakness, crypto continues to show strength.

— Michaël van de Poppe (@CryptoMichNL) January 15, 2025

“Yields [government bonds] and the US dollar index are showing weakness, while crypto continues to show strength,” he said.

According to CME FedWatch, 97.3% of traders expect the current rate to be maintained.

Bitcoin reacted to the macro data with a sharp rise — the asset jumped from $97,000 to nearly $100,000, but failed to clear the psychological threshold. The digital gold is now holding above $99,000.

According to CoinGecko, all top-10 digital assets by market capitalisation were in the green. Ethereum rose 3.8% over 24 hours, topping $3300.

XRP led daily gains and had shown positive momentum even before the CPI release. At the time of writing, the coin tested the $3 mark and trades around $2.98.

Equities also reacted positively to the figures: the S&P 500 index added 1.7%, and the Nasdaq 100 — 2.2%.

On December 18, the Fed cut the target range for the key rate by 25 bps, to 4.25–4.5% per annum, which prompted a correction in the crypto market.