Bitcoin has been consolidating in a range 10%-15% below record highs as investors largely tempered expectations of further interest rate cuts.

ByKrisztian Sandor|Edited by Stephen AlpherUpdatedJan 15, 2025, 1:47 p.m.UTCPublishedJan 15, 2025, 1:40 p.m.UTC

December CPI data was released Wednesday morning (Maria Lin Kim/Unsplash)

What to know:

  • Headline inflation rose faster than expected last month, but the year-over-year core rate declined, cheering investors.
  • Policymakers had previously been frustrated at the core rate's stickiness.
  • The price of bitcoin jumped to $98,500 following the data.

While headline inflation came in faster than hoped in December, investors for the moment are in buy mode after an unexpected decline in the year-over-year core rate.

The closely-watched Consumer Price Index (CPI) increased 0.4% in December, slightly higher than analyst consensus and the previous month's 0.3%. On a year-over-year basis, CPI was up 2.9%, compared to analyst forecasts for 2.9% and previous month's reading at 2.7%.

Core CPI, which excludes food and energy costs, rose 0.2% in December, versus expectations for 0.2% and the previous month's 0.3% figure. Core CPI year-over-year, however, dipped to 3.2% against forecasts for 3.3% and the November rate of 3.3%.

The core pace of inflation is of considerable import to policymakers, who have expressed at least a modest bit of frustration over its stickiness above 3% as headline inflation fell at a far quicker pace.

The price of bitcoin (BTC) rose about $1,500 in the minutes following the report to $98,500 following the report, up 2% over the past 24 hours, CoinDesk data shows.

In traditional markets, U.S. stock index futures added about 0.5% after the data, while bond yields and the dollar both sharply declined.

Crypto markets have traded rangebound through January at the whims of macroeconomic data and monetary policy expectations amidst a strong economy and concerns of sticky inflation. Bitcoin consolidated mostly below $100,000 since Federal Reserve Chair Jerome Powell's hawkish comments in December. That, along with a string of stronger-than-forecast economic and inflation data, led market participants to nearly erase all expectations for rate cuts this year.