🔎 What is the Consumer Price Index (CPI)?
It is a measure used to gauge the average change in prices of goods and services consumed by citizens, and is a key indicator of inflation.
Released monthly by agencies such as the Bureau of Labor Statistics in the United States.
CPI increase = inflation rise = possibility of interest rate hike.
CPI decrease = inflation slowdown = possibility of monetary policy easing.
📉 How does CPI affect cryptocurrencies?
1 - CPI increase ➡️ high inflation:
Could prompt the Federal Reserve (Fed) to raise interest rates.
Rate hike = liquidity withdrawal from the market = decreased risk appetite.
Result: Downward pressure on cryptocurrencies like Bitcoin and Ethereum.
2 - CPI decrease ➡️ inflation under control
Possibility of monetary policy easing or interest rate stabilization.
Liquidity injection or market optimism = appetite for high-risk assets.
Result: Often an increase in cryptocurrency prices.
Monitoring the Consumer Price Index (CPI) and its impact on cryptocurrencies (Crypto).🟢 Current situation (as of May 2025):
Latest U.S. CPI data (released in May 2025) showed:
Slight increase in inflation (annual CPI around 3.4%).
The Federal Reserve is still hesitant to lower rates quickly.
Cryptocurrency markets experienced volatility but maintained strong levels after the drop in March.
🔔 What to watch for:
Upcoming monthly CPI data (usually released in the middle of each month).
Federal officials' letters after the CPI data was released.
Market expectation indicators such as the FedWatch tool.