- U.S. CPI data release causes crypto market fluctuations, Bitcoin drops 4%.
- Bitcoin recovers, surpassing $70,000; altcoins like SOL, BCH, DOT decline.
- Analyst suggests U.S. may let inflation exceed 2%, boosting Bitcoin appeal.
On the day before Thursday, the U.S. Central Bank made public the Consumer Price Index (CPI) data for the month of March, which did not align with what investors had predicted. The release of the CPI data led to fluctuations in the cryptocurrency market, causing a number of digital currencies to decline in value.
Bitcoin’s
It is important to note that Bitcoin’s price movement seemed to be disconnected from the anticipated market reactions to the CPI data. It demonstrated greater resilience compared to many of the major alternative cryptocurrencies, which were more affected by the inflation data.
While Bitcoin made a comeback, the majority of other cryptocurrencies did not perform as well. Major alternative coins such as Solana (SOL), Bitcoin Cash (BCH), Polkadot (DOT), and Aptos (APT) saw their values decrease by between 5% and 7%. The governance token of the decentralized exchange Uniswap (UNI) experienced a drop of over 10%. The decline in UNI’s value was also influenced by actions taken by the U.S. Securities and Exchange Commission (SEC).
In the wake of the CPI data release and the ensuing responses from the market, Reflexivity Research co-founder Will Clemente reflected on the CPI numbers and deemed them less important when considering the broader context of the U.S. debt dilemma. In a post on platform X, Clemente outlined three potential paths for the U.S. given the current conditions: default on the debt, hope for a massive productivity surge driven by idealistic advancements in artificial intelligence or allow inflation to continue unabated.
Clemente believes that after Bitcoin’s recovery, the market understands that the decision-makers will choose the third option, allowing inflation to exceed the 2% goal. Consequently, investors are looking to Bitcoin as a hedge against rampant inflation. He views this as the most sensible choice of the three, observing that the chances of the other two occurring are slim.
Disclaimer: The insights, perspectives, and data presented in this price analysis are published in good faith. Readers must conduct their own research due diligence. Any decision made by the reader is solely their responsibility, and Crypto Outlooks shall not be held responsible for any consequential or incidental harm or loss.
