The Federal Reserve decided to leave interest rates unchanged. The U.S. Consumer Price Index [CPI] data revealed that inflation stayed at 0.3% in May. This further exceeded market expectations. Investors were closely awaiting this inflation data to review the state of the U.S. economy. In addition, cryptocurrency investors were also assessing this data while keeping a close look at Bitcoin [BTC].
With inflation cooling faster than projected, Bitcoin managed to rake in $1,500 in seconds following the news. BTC rose to a high of $69,411.3. This, however, did not last very long as the king coin dipped back to the $67,000 level. Despite this drop, several continue to bet big on BTC. 10x Research affirmed its optimism around BTC and a potential rally. Markus Thielen said,
“Our recommendation remains unchanged: to stick with the winners [Bitcoin] and avoid others [such as Ethereum]. Our previous analysis has shown that a lower CPI number tends to lift Bitcoin prices, and we anticipate this trend will continue.”
The rest of the market also witnessed moderate uptrends. Ethereum [ETH] for instance surged by 3% reaching a high of $3,652.
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How Does This Help Bitcoin?
The research report also highlights that spot Bitcoin exchange-traded funds [ETF] in the U.S. have seen substantial inflows during the slowdown in inflation. Thielen reminded the market that ETF flows broke their dry spell only after December CPI came in higher in January. He further added,
“ETF flows turned positive at the end of January but only started to accelerate slightly ahead of the CPI data release on February 13. But when inflation again increased to 3.2% on March 12, Bitcoin ETF inflows stopped as the market priced out the narrative of 2-3 rate cuts.”
At press time, Bitcoin was trading at $67,368.95 following a 0.12% daily drop. The asset continues to reign the market with its $1.33 trillion market cap.
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