Bitcoin, Ethereum Surge 7.5%, 11% as US Inflation Slows to 2.4%

Bitcoin and Ethereum prices surged on Thursday following the release of the U.S. Consumer Price Index (CPI) data, which indicated a slower-than-expected increase in consumer prices for March. The CPI rose by 2.4% over the past 12 months, falling short of economists' expectations of a 2.6% increase. This data suggests a deceleration in inflationary pressures, which has been a significant concern for investors and policymakers alike.

The core inflation rate, which excludes volatile food and energy prices, also showed a slower increase, rising by 2.8% over the past year. This marked a notable improvement from February's 3.1% annual increase, providing further evidence of easing inflationary pressures. The March CPI increase was driven by a rise in new vehicle prices, but this was partially offset by a decline in used car and truck prices.

Consumer prices fell by 0.1% compared to February, marking the first month-to-month decline since 2020. This drop in prices has been closely watched by businesses as they navigate the economic landscape under the current trade regime. The Bitcoin price was around $82,000, reflecting a 7.5% increase over the past day and a 0.2% gain in the past hour. Ethereum and Solana also saw significant gains, with prices up by 11% each, hovering around $1,600 and $114, respectively.

Thursday’s inflation data release came after U.S. President Donald Trump's decision to delay tariff hikes on most countries for 90 days. This move provided markets with a sense of relief, as the White House's fluctuating approach to trade had caused market volatility in recent weeks. Trump lowered the “reciprocal” tariff rate to 10% for 90 nations and raised tariffs on Chinese imports to 125%, focusing his trade war on one of America’s biggest adversaries and largest trading partners.

Trump had recently imposed 25% tariffs on foreign cars and auto parts, which remained unchanged. The president's trade maneuver provided markets with much-needed clarity, according to analysts. The possibility of continued negotiations could support a sustained uptrend, as the worst-case trade war scenario has been temporarily shelved. The Federal Reserve has been monitoring the impact of Trump’s tariffs on its ability to fight inflation, raising concerns in December about the potential impact on price pressures.

Thursday’s inflation reading, while still above the Fed’s 2% target, represented the second straight month in which both CPI and its core measure fell. This data suggests that inflationary pressures may be easing, which could influence the Fed's monetary policy decisions in the coming months. The market's positive reaction to the inflation data and the delay in tariff hikes indicates that investors are optimistic about the economic outlook, with Bitcoin and Ethereum prices reflecting this sentiment.