Bitcoin hit a rally ahead of the Fed’s inflation-focused meeting on March 22 to decide on rate hikes.
Bitcoin (BTC) price rose sharply on news that US inflation had hit Dow Jones and Nomura estimates. In February, US inflation rose 0.4%m/m and 6%y/y as the Federal Reserve prepares its next rate hike exercise.
Can Bitcoin Hit $30K On Momentum From Latest US Inflation Report?
Bitcoin price spiked after the US inflation report, breaching the $25K threshold and currently sits at $26,014.33. This development already has analysts and observers pondering the sustainability of BTC’s latest rally. Besides, reports they also seem to ponder whether the prominent digital currency would rise substantially higher to hit $30K.
The Fed should announce its latest interest rate decision next week, with Chairman Jerome Powell suggesting a rate hike. However, some observers and analysts are still hopeful that the main bank can soften its aggressive hikes. The projected reason is the fall of three banks, including Silicon Valley Bank (SVB).
CPI February
Consumer Price Index (CPI) data for February shows inflation saw its lowest rise in 12 months since September 2021. In addition, reports also indicated that the release hit mainstream markets, while commodity markets digital currencies reacted positively. For example, leading altcoin Ether (ETH) has also rallied notably and is changing hands at less than $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 spending data, the Index will be based on a single calendar year of data. Additionally, this new calculation will also use 2021 consumer spending data.
Determined by the Bureau of Labor Statistics and used as a proxy for inflation, the CPI measures the average price change over time. This change includes consumer prices for a basket of goods and services in a country. In addition, the CPI reflects consumer spending patterns on food, transportation, housing, clothing, recreation, and health care. The measure also plays a vital role in adjusting wages, benefits and social security payments for inflation. In addition, the CPI is used to measure economic performance and set monetary policy.
According to the US Department of Labor statement, the housing index contributed the most to the monthly “basket” increase. Housing accounted for 70% of the CPI increase last month, including the indices for food, recreation and home furnishings.
CME Group Sets Trading Opportunities for Bitcoin Futures Event Contracts
In other BTC-related news, CME Group announced the start of event contract trading in Bitcoin futures. Weighing in on the development, Tim McCourt, global head of equity and currency products at the derivatives trading platform, said:
“Our new Bitcoin futures event contracts provide a highly transparent, limited-risk way for a wide range of investors to access the bitcoin market through a fully regulated exchange. These cash-settled daily expiring contracts will further complement our existing pool of 10 event-linked contracts on our benchmark futures markets, which have traded more than 550,000 contracts to date.”
Additionally, McCourt added:
“In addition, these new contracts will offer an innovative and lower-cost way for investors to exchange their views on bitcoin’s up or down price movements.”
CME Group has played an early participatory role in the crypto space, launching the world’s first BTC futures contracts in December 2017.
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Tolu is a Lagos-based blockchain and cryptocurrency enthusiast. He likes to demystify crypto stories down to the basics so that anyone anywhere can understand them without too much prior knowledge. When he’s not up to his neck in crypto-stories, Tolu likes music, loves to sing, and is an avid movie buff.
