Bitcoin and other cryptocurrencies rallied on Wednesday after U.S. inflation data came in slightly below expectations, boosting hopes that the Federal Reserve could start cutting interest rates later this year.
The world’s largest cryptocurrency spiked over 4% to above $69,500 within minutes of the inflation report’s release.
The Labor Department reported that the annual inflation rate cooled to 3.3% in May, down from 3.4% in April.
While still elevated, the lower-than-expected readings could allow the Fed to eventually ease off its aggressive rate hike measures.
Crypto prices surged on the inflation data, with Bitcoin climbing over $1,900 in a matter of minutes. Ether and other altcoins also posted gains as traders reassessed the macroeconomic situation.
Still, Wednesday’s report may not be enough to convince Fed Chair Jerome Powell and colleagues to immediately start slashing rates. At 3.3%, inflation remains well above the historically acceptable 2% target.
The Fed is scheduled to conclude its latest policy meeting later on Wednesday.
Also Read: Rate Hikes and the Fed – How Do They Affect Crypto Markets?