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Bitcoin Breaks Past $70,000 Ahead of US Inflation Data

Last Updated March 11, 2024 9:22 AM
James Morales
Last Updated March 11, 2024 9:22 AM
By James Morales
Verified by Peter Henn

Key Takeaways

  • Bitcoin surged to a new all-time high of $71,250 on Monday.
  • The Bureau of Labor Statistics will publish US inflation data this week.
  • If inflation is higher than expected, it could negatively impact the price of BTC.

Following Bitcoin’s historic climb above $69,000 last week, the cryptocurrency’s price witnessed another major spike on Monday, March 11. That day, it reached a new all-time high of $71,250. 

With the United States Bureau of Labor Statistics set to publish inflation data on Tuesday, March 12, however, any upsets threaten to throw cold water on the latest BTC rally.

How US Inflation Data Could Affect Bitcoin

As a historically volatile asset, the price of Bitcoin tends to correlate with interest rates. When rates are low, investors are more drawn to high-risk, high-reward asset classes like crypto. In contrast, high interest rates favor more stable, traditional investments.

Because of this relationship, when Consumer Price Index (CPI) data for January showed inflation to be higher than analysts were expecting, the price of Bitcoin dropped sharply.

As things stand, the median forecas t for February’s CPI stands at 0.3%, with a year-over-year rate of 3.1%. If either of these 2 figures are higher than anticipated when the Bureau of Labor Statistics publishes its data this week, crypto markets could pull back again.

All Eyes on Next Rate-Setting Meeting

During the Federal Reserve’s last four rate-setting meetings, central bankers have opted to hold interest steady as inflation has remained sticky.

At the next meeting on March 20, the Fed is widely expected to keep interest rates at their current level. But if inflation data published on Tuesday show the US economy to be worse than anticipated, it could delay any eventual rate cut.

While the exact moment can’t be known for certain, there is broad consensus that interest rates will start to fall before the end of the year. Once that does happen, it could propel Bitcoin to new heights, with some analysts  predicting the cryptocurrency to top $100,000 in 2024

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