Bitcoin Rises as February CPI Inflation Falls Below Expectations
Bitcoin (BTC) saw a modest uptick after February's Consumer Price Index (CPI) inflation came in lower than expected. The decline in inflation raises hopes that the Federal Reserve may cut interest rates, potentially boosting risk-on assets like cryptocurrencies.
Bitcoin Gains as Inflation Cools
According to the U.S. Bureau of Labor Statistics, the seasonally adjusted CPI rose by 0.2% in February, bringing the annual inflation rate down to 2.8%. This figure fell short of economists' 2.9% forecast and marked a decline from January's 0.5% increase.
The core CPI, which excludes volatile food and energy prices, increased by 0.2% month-over-month, below the expected 0.3% rise. On an annual basis, core CPI came in at 3.1%, slightly under the 3.2% estimate.
The lower-than-anticipated inflation figures
have fueled investor speculation that the Fed could ease monetary policy, improving liquidity in financial markets. A rate cut would likely benefit both stocks and cryptocurrencies.
Following the CPI release, BTC climbed from $81,000 to $84,500. Meanwhile, Dogecoin (DOGE), one of the leading memecoins, saw a 2.9% increase over 24 hours.
BTC’s Recent Volatility and Market Outlook
Last month, BTC dropped after inflation data exceeded expectations. Additionally, concerns over U.S. President Donald Trump's economic policies—particularly aggressive trade tariffs on Canada, Mexico, and China—have tempered bullish sentiment in digital assets.
BTC experienced a sharp decline this month, falling from $94,700 on March 2 to $76,800 on March 11. The overall cryptocurrency market lost approximately $600 billion in value, dropping from $3.2 trillion to $2.6 trillion.
Bitcoin's Path to Recovery
Despite the recent pullback, analysts predict a recovery by late 2025. While further short-term declines are possible, crypto entrepreneur Arthur Hayes believes central banks may resort to quantitative easing to stabilize financial markets and support risk-on assets like BTC.
CryptoQuant analyst ibrahimcosar forecasts that BTC could reach $180,000 by 2026, particularly if the U.S. dollar weakens. As of now, BTC is trading at $81,541, up 0.6% in the past 24 hours.
