Bitcoin rallied ahead of the March 22 Fed inflation meeting to decide rate hikes.
Bitcoin (BTC) price soared after US inflation hit Dow Jones and Nomura estimates. In February, US inflation rose 0.4% m/m and 6% y/y as the Federal Reserve prepares for its next round of rate hikes.
Can Bitcoin hit $30,000 on momentum from latest US inflation report
Bitcoin price spiked after the US inflation report, breaking above the $25,000 threshold, and currently stands at $26,014.33. This development has already made analysts and observers ponder the sustainability of BTC’s latest rally. Besides, reports also seem to wonder if the top-tier digital currency would rise significantly to $30,000.
The Fed is expected to announce its latest interest rate decision next week, with Chairman Jerome Powell suggesting an increase in the pace of rates. However, some watchers and analysts are still hopeful that the apex bank might ease its aggressive hikes. The predicted reason is the crash of three banks, including Silicon Valley Bank (SVB).
Consumer Price Index (CPI) data for February reflects that inflation saw its smallest 12-month increase since September 2021. In addition, reports also indicated that the release rattled conventional markets. , while digital currency markets reacted positively. For example, the leading altcoin Ether (ETH) has also spiked significantly and is changing hands below $1,800.
The latest CPI report is the second based on the new BLS weighting system. Although the CPI previously saw calculations using two years of expenditure data, the index will become based on a single calendar year of data. Additionally, this new calculation will also use consumer spending data from 2021.
Determined by the Bureau of Labor Statistics and used as an indicator of inflation, the CPI measures the average change in prices over time. This variation includes the consumer prices of a basket of goods and services in a country. In addition, the CPI reflects consumer spending patterns on food, transportation, housing, clothing, entertainment, and medical care. The measure also plays a vital role in adjusting wages, benefits, and social security payments to inflation. Also, the CPI is used to measure economic performance and set monetary policy.
According to the statement from the US Department of Labor, the housing index contributed the most to the monthly increase in the “basket”. Housing accounted for 70% of the CPI increase last month, including the food, leisure and furniture indexes.
CME Group Creates Trading Opportunities for Bitcoin Futures Event Contracts
In other BTC-related news, CME Group has announced the start of event-driven Bitcoin futures trading. Weighing in on the development, Tim McCourt, global head of equity and foreign exchange products at the derivatives trading platform, said:
“Our new Bitcoin Futures Event Contracts provide a risk-limited and highly transparent way for a wide range of investors to access the bitcoin market through a fully regulated exchange. These cash-settled, daily expiring contracts will complement our existing suite of 10 event-driven contracts linked to our benchmark futures exchanges, which have traded over 550,000 contracts to date.
Additionally, McCourt added:
“Additionally, these new contracts will provide investors with an innovative and cost-effective way to trade their views on bitcoin’s upward or downward price movements.”
CME Group played an early participatory role in the crypto space, launching the world’s first BTC futures contracts in December 2017.
Tolu is a Lagos-based cryptocurrency and blockchain enthusiast. He likes to demystify crypto stories to the essentials so that anyone, anywhere can understand without too much background knowledge. When not immersed in crypto stories, Tolu loves music, likes to sing, and is a movie buff.