Bitcoin Price Gains as US Inflation Drops to 2.8%

Key Points

• Bitcoin Price Gains as US Inflation Drops to 2.8%
• US CPI inflation dropped to 2.8% in February, below expectations.
• Bitcoin jumped to $83,371 as traders anticipated Fed rate cuts.
• Stock markets reacted positively, while the US dollar weakened.
• Analysts see this as a bullish signal for Bitcoin and risk assets.

The latest US Consumer Price Index (CPI) data came in lower than expected, showing inflation cooled to 2.8% in February instead of the anticipated 2.9%. This news triggered a wave of optimism in financial markets, as lower inflation raises the chances of interest rate cuts by the Federal Reserve (Fed) later this year.

Bitcoin Price Performance. Source: Techtoken

Bitcoin responded immediately, surging to $83,371, as traders took this as a signal that monetary tightening may soon ease. The stock market also rallied, with major indices posting gains, while the US dollar and Japanese yen weakened.

The Core CPI, which excludes food and energy prices, also came in lower than expected at 3.1% year-over-year, compared to the forecasted 3.2%. This marks the first decline in both headline and Core CPI since July 2024, signaling that inflation pressures are finally easing.

The latest economic trends could also impact the broader crypto industry, as regulatory and financial developments continue to shape the market. Recently, concerns have risen about geoblocking leading to massive losses in US crypto airdrops, which have now surpassed $5 billion. (Read more)

BREAKING: 🇺🇸 US inflation falls to 2.8%, lower than expectations.

🏎️🔥 Cryptocurrency Market PUMP COMING SOON$BTC $SOLCEX $SOL $ETH pic.twitter.com/0LTgFqIZ1b

— Leandro Crypto (@leandrosaeth) March 12, 2025

Fed Rate Cuts Could Push Bitcoin Even Higher

With inflation showing signs of cooling, the market now expects the Fed to take a more dovish stance, potentially injecting more liquidity into risk assets like Bitcoin. Lower interest rates generally boost BTC and tech stocks, as they make borrowing cheaper and increase demand for speculative assets.

Techtoken – Source

However, some experts caution that inflation could rise again due to potential trade tariffs from Donald Trump’s policies, which might lead to higher consumer prices.

Despite these concerns, Bitcoin has historically benefited from looser monetary conditions, and many traders now see this as a major tailwind.

#CPI is coming in 30 minutes. A high print would not be very welcomed (as usual).

Especially during uncertain times in the market like now, this kind of economic data usually has an increased impact.

A high number would likely move the bond yields back up which is the opposite… pic.twitter.com/7srtm429Ij

— Daan Crypto Trades (@DaanCrypto) March 12, 2025

Meanwhile, crypto-related regulatory battles continue. The US House recently voted to overturn the IRS DeFi broker rule, a move that could reshape how decentralized finance is taxed in the country. (Read more)

With the Fed’s next meeting approaching, all eyes are on policymakers to see if they confirm the market’s hopes for interest rate cuts in the coming months. Data from the CME FedWatch Tool indicates growing confidence that the Fed will cut rates sooner rather than later.

Interest rate cut probabilities. Source: CME fedwatchtool – Techtoken

Broader Market Risks and Uncertainties

While Bitcoin’s short-term price action remains bullish, other risks in the crypto space are raising concerns. Hyperliquid, a rising crypto trading platform, is under scrutiny for potential money laundering after suspicious trades were flagged by analysts. This raises questions about the security and compliance of newer decentralized platforms. (Read more)

Additionally, major projects like Solana have faced extreme volatility, with SOL’s price dropping 38% recently and analysts warning it could fall below $110 if the current trend continues. (Read more)

At the same time, cybersecurity threats in the crypto world are growing. Elon Musk’s social media platform, X, was recently hit by a cyberattack, sparking concerns over how centralized platforms protect user data. (Read more)

While inflation cooling and potential Fed rate cuts could fuel Bitcoin’s next rally, traders remain cautious as regulatory, security, and economic risks continue to shape the crypto landscape.