Crypto Market Plunges as US Inflation Surges

The crypto market experienced a downturn following the release of the US Consumer Price Index (CPI) inflation data for January, which came in hotter than anticipated. The CPI inflation rose to 3% on a year-over-year (YoY) basis, up from the previous month's reading of 2.9%. This unexpected increase sparked market concerns about a potential crypto market crash, given the recent volatility in digital assets due to macroeconomic concerns and the Federal Reserve's hawkish stance.

The Labor Department reported that the US CPI inflation rose to 3% in January, up from the prior month's reading of 2.9%. On a monthly basis, the inflation rose to 0.5%, up from the 0.4% spike noted in the prior month. Both these data points came in hotter than market expectations. Simultaneously, the Core CPI, which excludes food and energy prices, came in at 0.4% last month, up from the prior month's figure of 0.2%. On a YoY basis, the core US CPI soared to 3.3%, compared to December's figure of 3.2%. Wall Street was expecting the Core CPI to come in at 3.1% on a YoY basis and 0.3% on a monthly basis.

The crypto market reacted to the news, with Bitcoin's price falling to $94K following the release of the CPI inflation data. The hotter-than-anticipated inflation figure has raised concerns about the potential impact on the crypto market, as investors grapple with macroeconomic concerns and the Fed's hawkish stance. The crypto market has faced immense volatility lately, and the latest CPI inflation data has added to the uncertainty.