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Main Reasons Behind Bitcoin (BTC) Price Surge
Alex Dobnya
US inflation cooled significantly in June and Bitcoin is now approaching the $60,000 level
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The price of Bitcoin, the main cryptocurrency, flew to an intraday high of $59,516 on lower-than-expected inflation in the U.S.
The Bureau of Labor Statistics’ Consumer Price Index (CPI) surprised the market after economists had forecast a 0.1% increase in the headline CPI. Instead, the United States reported a negative CPI reading in June (the first since 2020).
Overall, the index rose 3% year-on-year, less than analysts had expected.
The better-than-expected inflation data can be attributed to lower gas and energy prices.
Fed swaps are now, as expected, pricing in further easing this year after June’s CPI numbers. In fact, traders now see a 25% chance of as many as three rate cuts in 2025.
Earlier this week, Federal Reserve Chairman Jerome Powell said the Fed had made “significant progress” in addressing inflation in his prepared testimony before the U.S. Congress. However, Powell also warned that keeping monetary policy tight could hurt the economy.
Last week, the leading cryptocurrency suffered a massive crash to a five-month low of $53,550 due to the double whammy of Mt. Gox redemptions and massive sell-offs initiated by the German state of Saxony. However, the favorable macro picture could provide battered Bitcoin bulls with a much-needed respite.
As reported by U.Today, Fundstrat’s Tom Lee, who believes that the price of Bitcoin could reach $150,000 this year, expected that inflation in the United States would eventually fall sharply in the second half of the year.
About the author
Alex Dobnya
Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader, and journalist with extensive experience covering everything from price analysis to Blockchain disruption. Alex has written over 1,000 stories for U.Today, CryptoComes, and other fintech media. He is particularly interested in regulatory trends around the world that are shaping the future of digital assets, and can be reached at alex.dovbnya@u.today.