CPI Down = Bitcoin Up? Here’s Why It Matters

April CPI came in lower than expected: 2.3% — the lowest since early 2021.

Markets reacted instantly… and crypto turned green.

But why does CPI impact crypto prices?

Here’s the simple version:

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1. Lower Inflation = Rate Cuts Incoming?

When CPI (inflation) drops, the Fed is less likely to raise interest rates.

In fact, the market starts pricing in rate cuts.

Lower rates = cheaper borrowing = more liquidity.

And more liquidity flows straight into risk assets like BTC, ETH, and altcoins.

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2. Dollar Weakens, Crypto Gains

As inflation eases and rate cuts loom, the USD typically weakens.

That’s when investors turn to crypto as a hedge and growth play.

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3. Risk Appetite Returns

When inflation fears cool off, traders move away from “safe” assets and dive back into risk-on mode — and that’s where crypto shines.

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Bottom Line:

> CPI down = Fed goes easy = money flows into crypto.

Bitcoin often rallies when inflation data softens.

But remember — the market also watches the Fed’s tone, upcoming rate decisions, and macro trends.