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**CPI Projected to Rise to 2.5%, What About Bitcoin?**
The Consumer Price Index (CPI) in the United States (US) is projected to rise to 2.5% from the previous 2.3% according to data from Investing.com. This increase comes as reciprocal tariffs for several countries come into effect.
The rise in CPI indicates that inflation is starting to respond to tariff policies, particularly in categories of consumer goods that are directly affected. Economists predict that inflationary pressure from this policy will become more pronounced in the coming months.
Additionally, Bitcoin (BTC) often serves as a positive catalyst against higher inflation. According to historical data, when inflation rises, interest in hedging assets like Bitcoin also increases as investors seek protection from the declining purchasing power of fiat currencies.
As a note, if CPI increases, Bitcoin has the potential to see a demand boost as a hedging asset. However, if inflation is considered too high and triggers concerns over interest rate hikes, Bitcoin's volatility could become more difficult to predict.
On the other hand, if inflation slows below expectations, for example to 2.3%-2.4%, the pressure on The Fed to raise interest rates decreases. This could be good news for the crypto market as it may encourage liquidity.
Meanwhile, a decrease in inflation could also signal a slowing economy, which serves as a cautionary signal for investors regarding volatility across various market sectors.
*Disclaimer Alert. Not Financial Advice* (NFA). *Do Your Own Research* (Bloomberg Image Source: Bloomberg
