Inflation Eases: Crypto Market’s Hilarious Rollercoaster Ride! 🎢💰

by

Ah, dear reader! Gather ’round as we delve into the curious case of the Federal Reserve’s inflation gauge, which, like a timid mouse, has shown signs of retreating from the clutches of high prices. This delightful turn of events has sent ripples through the financial markets, including the ever-volatile realm of cryptocurrencies. As inflation pressures ease, investors, those whimsical creatures, are reassessing their positions, leading to price movements that could make even a seasoned jester chuckle.

According to the esteemed Labor Department, the February consumer price index has risen a mere 0.2% from January, a figure so soft it could be mistaken for a freshly baked loaf of bread. This brings the annual inflation rate to a modest 2.8%, much to the surprise of Dow Jones economists, who had anticipated a more robust 0.3% monthly gain and a 2.9% yearly increase. Oh, the audacity of expectations!

“The U.S. February unadjusted CPI annual rate was recorded at 2.8%, the lowest since November last year; the U.S. February seasonally adjusted CPI monthly rate was recorded at 0.2%, the lowest since October last year. The U.S. February unadjusted core CPI annual rate was recorded…”

— Wu Blockchain (@WuBlockchain) March 12, 2025

Now, let us not forget the core CPI, that elusive creature which excludes the capricious costs of food and energy. It too has increased by 0.2% in the month and 3.1% over the year, a figure that falls short of the expected 0.3% monthly gain and 3.2% annual growth. How delightfully disappointing!

Historically, when inflation takes a leisurely stroll downwards, risk assets, including our beloved cryptocurrencies, tend to frolic in the fields of prosperity. But what of the crypto market, you ask? Ah, the reactions were as mixed as a pot of borscht!

How crypto market reacted

Initially, the crypto market danced with glee, with Bitcoin rebounding as much as 5%. However, Ethereum, that fickle friend, decided to take a slight dip of 0.87%. Meanwhile, XRP, SOL, and ADA were gallivanting upwards, each boasting gains of over 3% in the last 24 hours. And lo! The social cryptocurrency pi soared a staggering 19% during this time, as if it had just discovered the secret to eternal youth. Yet, not all were so fortunate; Tron, Aptos, Aave, and Ethereum Classic found themselves in the red, nursing losses between 1% and 7%. Such is the capricious nature of the market!

According to the CME FedWatch Tool, the market is now pricing in three quarter-point rate decreases this year, as if the Federal Reserve were a magician pulling rabbits out of hats. The producer price index, another inflation gauge, is set to make its grand entrance on Thursday, promising to shed light on the health of the U.S. consumer amidst whispers of an economy softening like an overcooked potato.

These figures arrive just in time for the Federal Reserve’s March meeting, where officials are expected to sit patiently, like cats watching a mouse hole, waiting for further clarity on the inflation outlook. It seems they are largely inclined to hold rates unchanged at next week’s gathering, much to the chagrin of those who thrive on volatility.

Read More

2025-03-12 19:13