Lower-than-expected CPI fuels crypto surge, but volatility remains a concern.
Bitcoin Jumps After Positive Inflation Report
Bitcoin rebounded above $82,000 after the February Consumer Price Index (CPI) report showed inflation rising just 0.2%, bringing headline inflation to 2.8%. The crypto market reacted positively, with XRP up 6%, Dogecoin gaining 4%, and Cardano rising 2% in the last 24 hours.
Short-Lived Tailwinds Amid Economic Uncertainty
Despite the rally, analysts warn the momentum may be short-lived. David Siemer, CEO of Wave Digital Assets, cautioned that trade tensions and new tariffs could reintroduce inflationary pressures, maintaining high volatility in traditional and crypto markets.
Fed Policy and Liquidity Crunch Weigh on Crypto
The crypto market has dropped 30% from December highs, driven by fewer expected interest rate cuts in 2025. Reduced economic liquidity has led investors to pull back from riskier assets, putting pressure on Bitcoin and altcoins.
Trump’s Tariff Policies Add to Market Jitters
President Donald Trump’s shifting trade policies—including aggressive tariffs on China, Canada, and Mexico, followed by partial rollbacks—are raising consumer prices and fueling economic uncertainty. His refusal to rule out a recession in a recent Fox News interview further unsettled investors.
Crypto Reserve Plan Fails to Impress Markets
Trump’s long-awaited national crypto reserve announcement also fell flat. Instead of purchasing new Bitcoin or altcoins, the government will use seized crypto assets to fill its reserves, failing to provide new institutional demand to support prices.
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