Crypto

Bitcoin Soars 5% to $64,910 After April CPI Signals Eased Inflation

Bitcoin surges over 5% to $64,910.57 after April's CPI report suggests easing inflation, marking its best day since March.

By Bill Bullington

5/15, 15:33 EDT
Bitcoin / U.S. dollar
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Key Takeaway

  • Bitcoin surged over 5% to $64,910.57, marking its best day since March 25, following a cooler April CPI report indicating eased inflation.
  • The cryptocurrency's movement is closely tied to macroeconomic indicators, with analysts pointing to potential rate cuts as the next major catalyst for price changes.
  • Despite recent volatility and influence from broader market trends, bitcoin remains up 7% for the week, breaking a six-week losing streak.

Bitcoin Reacts to Inflation Data

Bitcoin experienced a notable surge, climbing over 5% to reach $64,910.57, following the release of the April consumer price index (CPI) which indicated a slight easing in inflation. This movement marked Bitcoin's most significant daily gain since March 25. The cryptocurrency briefly surpassed its 50-day moving average, a level it hadn't breached since April 13, though it later receded below this threshold. Owen Lau, an analyst at Oppenheimer, highlighted the impact of the CPI data on Bitcoin, stating, "The slightly lighter than expected CPI number modestly increased the chance of a rate cut, which is still a strong influencer to bitcoin price."

U.S. Inflation and Bitcoin's Surge

The CPI report revealed a 0.3% increase from March, slightly below the anticipated 0.4%, with a year-over-year rise of 3.4%. This data, suggesting a cooling in core CPI for the first time in six months, has potentially reignited investor interest in risk-on assets like cryptocurrencies. Leena ElDeeb from 21Shares noted the recovery in investors' appetite could lead to more flows into bitcoin spot ETFs, which had seen a lull. Despite uncertainties around rate cuts, the unique position of Bitcoin as both a risk-on and risk-off asset means its long-term trajectory remains unaffected by short-term Fed policies, according to ElDeeb.

Market Response and Bitcoin's Outlook

Following the CPI announcement, Bitcoin's price saw an immediate increase, jumping more than 1% to $63,700. This reaction underscores the cryptocurrency's sensitivity to macroeconomic indicators, especially in a period where traditional catalysts like ETF launches and halving events are in the past. The broader financial markets also responded positively to the inflation and retail sales data, with the S&P 500 and Nasdaq hitting record highs and Treasury yields falling. This environment has bolstered Bitcoin's performance, pushing it up 7% for the week and potentially ending a six-week downturn.

Street Views

  • Owen Lau, Oppenheimer (Neutral on Bitcoin):

    "The slightly lighter than expected CPI number modestly increased the chance of a rate cut, which is still a strong influencer to bitcoin price... After the ETFs and halving, the next major catalyst is a rate cut. Bitcoin is likely to remain rangebound and trade along with macro data points, until we see a clearer path for rate cut."

  • Leena ElDeeb, 21Shares (Cautiously Optimistic on Bitcoin):

    "With the U.S. core CPI cooling down for the first time in six months, we could be seeing a recovery of investors’ appetite for risk-on assets like crypto, instigating more flows into bitcoin spot ETFs... Although with the rate cuts still in question, recovery might be slow."