The cryptocurrency market witnessed a significant increase on Wednesday, May 15, following the release of the latest US inflation data. Bitcoin (BTC) price emerged as the star performer, breaking the $66,000 mark for the first time since April 24. It recorded a significant increase of 7% in just 24 hours. This upward trend is attributed to a combination of factors, the most prominent of which is U.S. Consumer Price Index (CPI) data.
Bitcoin price rises on low inflation data
cryptokoin.com As we reported, the CPI report revealed a pleasant surprise: core inflation fell to 3.4%, its lowest level in 3 years. This positive development triggered increased activity in the Bitcoin market and attracted great interest, especially from large global banks. This correlation between low inflation and increased investment in crypto assets indicates a potential shift in investor sentiment. Bitcoin can increasingly be seen as a hedge against economic uncertainty, offering a store of value that is not as susceptible to inflation as traditional assets.
Additionally, positive inflation figures signal the possibility of an imminent cut in interest rates in the United States. While the Fed maintains a cautious wait-and-see approach, recent data may prompt them to accelerate their timelines. However, some concerns remain about the rate of decline in inflation, which limits the scope of possible interest rate cuts this year.
Institutional investor interest is increasing
Another important factor behind Bitcoin’s price rise is increasing institutional interest, especially in Bitcoin Exchange Traded Funds (ETFs). Recent filings with the Securities and Exchange Commission (SEC) have revealed that leading banks such as JPMorgan, Wells Fargo, UBS and Bank of Montreal have made significant investments in Bitcoin ETFs. These statements played an important role in supporting Bitcoin’s market value.
Further fueling the market’s momentum are investments from organizations like the Wisconsin State Board of Investments, which recently allocated $99 million to BlackRock’s Spot Bitcoin ETF. The ETF market is buzzing with anticipation as more institutions are expected to join the game. Of particular note is the recent appointment of Salim Ramji, former head of global ETFs at BlackRock, as CEO of Vanguard. Vanguard, which has previously taken a negative stance on spot Bitcoin ETFs, may reconsider its position under Ramji’s leadership, potentially leading to an even larger influx of institutional influence.
Some altcoins also joined the party
The positive sentiment surrounding the crypto market wasn’t just limited to Bitcoin. Memecoins, which recently faced a sharp correction along with other crypto assets, also experienced a significant rally. The fact that the US inflation data came in below expectations with 0.3% monthly played an important role in this revival. Falling rates often increase investors’ appetite for risk, encouraging them to allocate funds to riskier assets such as memecoins.
Memecoin’s market capitalization witnessed an increase of 8.8%, while Solana memecoins continued to lead with a gain of 11.8%. Dog-themed tokens like the ever-popular Shiba Inu and Dogecoin (DOGE) also rose a healthy 6-7 percent. In addition, Floki (FLOKI) and Pepe (PEPE) increased by 10 percent and 6 percent, respectively. Arweave (AR) and Wormhole (W) are among the most rising coins in the top 100 by market value.
To be informed about the latest developments, follow us twitter‘in, Facebookin And InstagramFollow on and Telegram And YouTube Join our channel!