Bitcoin surged past $100,000 on Wednesday, extending its rally as an optimistic inflation report boosted investor confidence in riskier assets.
The leading cryptocurrency climbed over 3% to $99,493.26, according to Coin Metrics, marking a 7% gain over two days. Bitcoin peaked at $100,715.13 during late-afternoon trading.
The broader cryptocurrency market followed suit, with the CoinDesk 20 index rising 7%. Major crypto-related stocks also saw significant gains, including Coinbase, which rose 7%, MicroStrategy at 5%, and Mara Holdings with a 4% increase.
Bitcoin and Inflation: How the Latest Data Drives Market Confidence
The rally was driven by December’s consumer price index (CPI) data, which revealed an unexpected slowdown in core inflation. This followed another encouraging report on Tuesday, where the producer price index (PPI) showed wholesale prices rising less than anticipated.
Earlier in December, the post-election crypto rally lost momentum after Federal Reserve Chair Jerome Powell issued a warning about inflation. Bitcoin experienced sharp losses last week, briefly dipping below $90,000 on Monday as rising bond yields led investors to pull back from high-risk assets.
Correlation with Traditional Markets
In recent weeks, Bitcoin’s price movements have mirrored trends in the equities market. This correlation has been amplified by the growing popularity of Bitcoin ETFs, which have further institutionalized the asset. Bitcoin’s link to the S&P 500 strengthened last week, while its correlation with gold weakened significantly since the end of December.
As inflation concerns ease, the cryptocurrency market appears to be regaining its footing, with Bitcoin leading the charge past the $100,000 milestone.
Be the first to comment