Market momentum in cryptocurrencies tentatively eases as traders grapple with fresh inflation figures.
Cryptocurrencies Hang Tight Amid Inflation Data
Bitcoin and most altcoins maintain their course on Tuesday, following the release of America's consumer inflation data in April.
Our Buddy Bitcoin (btc0.19%) and Ethereum (eth-2.02%), the legendary duo, are currently trading at a cool $103,800 and $2,520 respectively. The total market cap of all cryptocurrencies lingers around the $3.3 trillion mark.
The Bureau of Labor Statistics pitches in with the April inflation figures. The annual inflation rate takes a slight dip, whilst the monthly figure rises less than anticipated. The headline consumer price index hops from a negative 0.1% in March to a modest 0.2% in April, resulting in a 2.3% annualized figure. These numbers were lower than the median estimates of 0.3% and 2.4% respectively.
Core inflation, the nifty version sans volatile food and energy products, takes a wee step up from 0.1% to 0.2%. It holds steady at 2.8%, more than the Federal Reserve's desire of 2.0%.
These digits contribute to Donald Trump's plea to the Fed for some interest rate reductions, a decision that would undoubtedly provoke risky investments including Bitcoin and other sock-rocking altcoins.
Last week, the Fed kept interest rates parked, and warned that inflation would continue to ascend due to import duties. Jerome Powell, the Fed Chair, hinted that the bank will exercise self-restraint and assess the of import duties.
Wall Street analysts have scuttled their interest rate cut odds. On Monday, Jim Bianco, the popular economist, jotted that the odds of a June cut have plummeted to 8%. July odds have nosedived to 35%, and September odds slipped from a total confidence of 100% earlier in the month to a sizable 66%.
However, if the inflation numbers keep sinking and America throws most import duties overboard, a rate cut could happen as soon as July. Polymarket odds for a July rate cut leaped to 27% on Tuesday from Monday's 20%.
Bitcoin and altcoins tend to flourish when the Fed either lowers rates or hints at a decrease. During the pandemic, they made quite the splash when the Fed trimmed rates down to practically zero. Crypto assets also galloped in 2023 when the Fed pointed to reductions as post-pandemic inflation data began to ease up.
Pi Network's 25% Plummet Breaks Week-long Rally
In other news, Pi Network, our new kid on the block, slides more than 25%, snuffing out a week-long rally.
- Despite the release of the April consumer inflation data, Bitcoin and most other altcoins maintained their course, with Bitcoin trading at $103,800 and Ethereum at $2,520.
- The total market cap of all cryptocurrencies, including Bitcoin and Ethereum, hovers around the $3.3 trillion mark.
- The relatively lower-than-expected April inflation rate of 2.3% year-on-year, has sparked calls for interest rate reductions from former president Donald Trump, potentially good news for risky investments such as Bitcoin and other altcoins.
- Core inflation, the version excluding volatile food and energy products, rose from 0.1% to 0.2%, remaining above the Federal Reserve's target of 2.0%.
- If inflation continues to decrease and America eliminates most import duties, a potential interest rate cut could occur as early as July, traditionally a favorable environment for cryptocurrencies like Bitcoin and Ethereum.
- Pi Network, a newer cryptocurrency, experienced a 25% slump after a week-long rally, a potential setback for investors who were part of its global community.
