Bullish Bitcoin Hits $26,000 as Year-Over-Year CPI Comes in at 6.0%
TL;DR Bitcoin surged over $26,000 after the US Consumer Price Index (CPI) came in at an expected rate of 6.0% Year-over-Year (YoY). The MoM core CPI has also increased by 0.1% from last month’s data of 0.4%. Peter Schiff believes that inflation is likely to shoot up despite all the interest rate hikes.
Bitcoin bursts over $26,000 after the Consumer Price Index (CPI) comes at an expected rate of 6.0% Year-over-Year (YoY.)
The US CPI increased by 0.4% Month-over-Month (MoM) in February, equivalent to the forecast rate. At the same time, the core CPI, which excludes the food and energy sector, increased by 0.5% MoM, 0.1% higher than the forecast of 0.6%.
The MoM core CPI has also increased by 0.1% from last month’s data of 0.4%.
YoY, the CPI increased by 6.0%, equivalent to the forecast, and the Core CPI also increased at par with the estimated rate of 5.5%.
The transportation and Gas utility sector had the largest price changes over a year, 14.6% and 14.3%, respectively.
Price changes over last year:
– Transportation: +14.6%
– Gas utilities: +14.3%
– Electricity: +12.9%
– Food at home: +10.2%
– Food away from home: +8.4%
– Shelter: +8.1%
– Overall CPI: +6.0%
– New cars: +5.8%
– Gasoline: -2.0%
– Used cars: -13.6% — unusual_whales (@unusual_whales) March 14, 2023
Bullish Bitcoin Crosses $26,000
As the CPI data came out equivalent to the estimated numbers, the price of Bitcoin shot up over $26,000. Within 30 minutes of the announcement, Bitcoin skyrocketed more than 6.5%; however, as of writing, it is trading at around $25,791.
Simultaneously, the second largest cryptocurrency – Ethereum, also rallied over 5.5%. It is currently trading at $1740 after touching $1765.
BTC/USDT, Binance Image Source: TradingView
According to Coinglass, over $85 million worth of trades were liquidated in 1 hour after the announcement from The Bureau of Labor Statistics.
Economist Peter Schiff Predicts Rising Inflation
The renowned economist Peter Schiff has a hawkish stance and believes that inflation will likely shoot up. He considers that inflation has yet to reach its target of 2% despite all the interest rate hikes.
He says, “Since the Fed is basically done hiking, the most likely direction for CPI from here is up.”
Just because the Feb. #CPI wasn't hotter than expected doesn't mean the #Fed is getting closer to its 2% #inflation target. Despite all the rate hikes, YoY CPI still rose 6% and core 5.5%. Since the Fed is basically done hiking, the most likely direction for CPI from here is up. — Peter Schiff (@PeterSchiff) March 14, 2023
The next Federal Market Open Committee (FOMC) meeting is on Mar. 22, 2023. There is an 86.4% probability of a 25 bps interest rate hike in the next FOMC meeting.
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