Bitcoin Hits Highest Level in More Than a Month After Softer Than Expected Inflation Reading

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Cryptocurrencies have come under immense pressure after the collapse of a so-called stablecoin called terraUSD.

Umit Turhan Koskun | Nurphoto via Getty Images

The price of bitcoin surged on Tuesday following the release of a highly anticipated Consumer Price Index report.

According to Coin Metrics, bitcoin was last up around 4% to $17,755.60. At one point, it shot up to $17,957.35, its highest level in over a month. Ether rose 4% to $1,315.61.

The U.S. consumer price index for November, which measures a broad basket of goods and services, rose just 0.1% from the previous month, the U.S. government said on Tuesday.

Economists polled by Dow Jones expected a monthly increase of 0.3%. This fueled investor hopes the Federal Reserve will slow the pace of its interest rate hikes.

Compared to the same period of the previous year, the index gained 7.1%, against expectations of 7.3%.

The softer-than-expected report pushed the 10-year Treasury yield lower. Rising yields make future earnings, such as those promised by higher-risk, growth-oriented companies, less attractive.

The post-CPI jump follows another spike earlier in the morning, suggesting buying pressure has been building, according to Noelle Acheson, an economist at the Crypto is Macro Now newsletter and former head of market intelligence. market at Genesis.

“It feels like more and more people are starting to accept that the bottom can be reached, and those are potential accumulation levels,” she told CNBC.

“Uncertainty around further contagion is always the main overhang and any bad news there could drive prices down, but smart investors are weighing the odds here,” she added.

The move comes as investors continue to monitor and assess the fallout from the once popular exchange FTX, whose leader Sam Bankman-Fried was indicted by the Securities and Exchange Commission on Tuesday for defrauding investors. Concerns about customer withdrawals from Binance, the industry’s largest exchange, are also growing.

Bitcoin’s price has been relatively stable over the past month since the big drop following FTX’s explosion in November, as the macro environment continues to boost the crypto asset to some extent, even though the scandal FTX has shaken investor confidence.

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