Crypto market rallies as Bitcoin eyes $100K following mixed US CPI data
|- Bitcoin is approaching the $100K threshold as the crypto market saw a resurgence after the release of the US December CPI data.
- Inflation met expectations in December, rising 2.9%, while Core CPI rose to 3.2%.
- XRP, Stellar and AVAX rallied alongside several meme coins and AI tokens.
Bitcoin and the general crypto market marked quick gains on Wednesday, adding nearly $100 billion in market capitalization following the release of December's US Consumer Price Index (CPI) data, which rose to 2.9%.
Bitcoin surges as CPI data stirs crypto market recovery
US CPI data for December stirred a rally across crypto assets with headline CPI rising to 2.9% from 2.7% in November. The yearly core CPI reading also ticked to 3.2% in December, although it failed to meet expectations of a 3.3% increase.
"The core CPI, which excludes volatile food and energy prices, rose 3.2% on a yearly basis — below November's gain and analysts' estimates for a 3.3% increase. The monthly core CPI rose 0.2% in the last month of 2024," FXStreet reported.
The lower-than-expected core CPI data triggered buying activity across the crypto market with Bitcoin rallying close to $100K for the first time since January 7.
Bitcoin's rally tallied with movements in traditional risk assets like stocks. The S&P 500 saw an uptick of 1% following the release of the inflation data.
Likewise, several altcoins marked gains as the market began its recovery. XRP, Stellar (XLM) and Avalanche (AVAX) surged 14%, 15% and 9%, respectively, before seeing a slight decline.
Other sectors were not left behind, particularly the AI and meme sectors. AI token Virtual Protocol (VIRTUAL) and AI meme coin ai16z (AI16Z) were among the largest gainers, rallying about 24% and 18%, respectively.
The recent rally marks a recovery from last week's crypto market plunge, which began after the Federal Reserve (Fed) released a commentary on their 2025 outlook. Losses stretched into the weekend following the US Nonfarm Payrolls (NFP) data release.
In other news, the US government issued a statement stating that 94,643 BTC worth $11.8 billion, confiscated after Bitfinex was hacked in 2016, should be returned as in-kind restitution.
Bitfinex was identified as the sole victim of the hack, conducted by couple Lichtenstein and Morgan, who pleaded guilty to money laundering charges in 2023. The two initially laundered nearly 120,000 Bitcoin in 2016 and spent nearly 25,000 BTC before being discovered.
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