The world’s most popular cryptocurrency Bitcoin is fluctuating right now as investors wait for new U.S. inflation data to be published. The Consumer Price Index (CPI), this data, is a measure of the average change in prices paid by consumers for goods and services. It is a measure of how prices are rising or falling that helps serve as a key indicator of inflation.
In the recent months, Bitcoin has been price sensitive to CPI reports. For example, in February 2025, Bitcoin value slumped below $95,000 due to a broad CPI reading of 3.0%, exceeding economists’ forecast 2.9%.
In January 2025, Bitcoin fell by 1.3% on 3.0% CPI year over year rise and the 2.9% that was expected.
Higher inflation causes them to lose faith in cryptocurrencies, as we can see from these examples. On the other hand, Bitcoin has moved positively when inflation data has come in line with or lower than expectations. The annual inflation rate in December 2024 came in at 2.9%, in line with forecasts. Meanwhile, the stability aided Bitcoin to grow by 2.9% to $99,032, with the investors considering the economic outlook more stable.
In addition, the price of Bitcoin returned to above $100,000 in January 2025 based on the positive inflation data and favourable regulatory news, indicating that a lower inflation rate can sharpen crypto investors’ confidence.
US CP is expected to have risen 0.3% for February 2, according to a Reuters poll. However, if actual data matches or is less than this expectation, then Bitcoin’s price can stay stable or even increase, since this could mean that inflation is on leash. Therefore, if the CPI beats expectations and shows higher inflation, Bitcoin could then suffer from downward pressure. Higher inflation is often seen by investors as a signal that the Federal Reserve will continue or increase interest rate hikes which tend to hurt the appeal of riskier assets such as cryptocurrencies.
In the end, Bitcoin’s price is related to the U.S. inflation data. However, all eyes are on the new CPI report approaching to see if inflation trends will affect Bitcoin’s value. The next big question is whether prices will go up or down, which will mainly depend on how the inflation data compare to, below or top market expectations.
Also read: Bitcoin & Ethereum Price Predictions: BTC in Senate Reserves, ETH’s March 5 Outlook
