Bitcoin reacted positively to Tuesday’s release of the May Consumer Price Index (CPI), which showed a 4% rise, lower than the projected 4.1% and April’s 4.9%. The largest cryptocurrency in market value was recently trading at $25,846, down 0.2% over the past 24 hours.
While today is good news for the U.S. economy and Bitcoin, any wobble that may come from tomorrow’s interest rate decision or the looming recession on the U.S.’s horizon is also likely to prove beneficial for crypto assets, said Tim Frost, CEO of digital wealth platform Yield App.
The Federal Reserve now seems likely to halt its year-long campaign of monetary hawkishness, which had sent risk-on assets spiraling when the CPI was raging at 8.6% a year ago. The SEC lawsuits against crypto exchanges Binance and Coinbase have provided certainty to markets, and may force the courts and regulators to settle on a designation for cryptos as securities, commodities or otherwise.
Major stock indexes were largely buoyed by the CPI report, while Ether, the second largest crypto by market value, followed Bitcoin’s lead, rising initially before returning some of its gains. Among the 19 tokens mentioned in either the Binance or Coinbase suits, or both, ALG and MATIC, the tokens of the Polygon and Algorand smart contracts blockchains, were recently up 0.3% and 0.8%, while AXIE, the native crypto of gaming platform Axie Infinity, fell slightly.
Oliver Rust, head of product at independent inflation data aggregator Truflation, noted the decline in energy prices and overall inflation readings, and faintly encouraging signs that the hot jobs market was cooling. However, he warned that the economy appears to be trending towards a quarter of negative growth at the very least.