United

Bitcoin

April

Despite a slight increase in September, the cooling trajectory of United States inflation continues to support prospects of more interest rate cuts that could set up a favorable scenario for Bitcoin and other cryptocurrencies.&nbsp;
The US Bureau of Labor Statistics reported on Oct. 10 that the Consumer Price Index (CPI) rose at a 2.4% annual rate in September — its lowest level since February 2021. 
The data is just above the expected 2.3% for the month but still in a negative trend — below August’s year-over-year increase of 2.5%. Two years ago, the country’s inflation rate stood at 8.2%. It peaked at 9.1% in June 2022.
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 <img alt="CPI data to drive 'favorable impact' on Bitcoin prices — 21Shares" src="https://s3.cointelegraph.com/uploads/2024-10/0192774c-0f2c-7873-b7ea-df5f75ccb896" title="">
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 Source: <a data-ct-non-breakable="null" href="https://www.bls.gov/news.release/cpi.htm" rel="nofollow noopener" target="_blank" text="null" title="https://www.bls.gov/news.release/cpi.htm">US Bureau of Labor Statistics</a>
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According to <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/21shares-ether-etf-waive-fees" rel="" target="_self" text="null" title="https://cointelegraph.com/news/21shares-ether-etf-waive-fees">digital assets firm 21Shares</a>, despite the “persistent rise in prices,” recent nonfarm payrolls data, which showed that unemployment fell from 4.2% to 4.1%, suggests an “80% probability of a 25 basis point rate cut in the upcoming month.”
“Bitcoin and a broader array of crypto assets are particularly sensitive to inflation metrics, as these indicators heavily influence the Fed’s monetary policy decisions,” explained Leena ElDeeb, research analyst at 21Shares. She added:&nbsp;
<blockquote>
 “A reduction in rates tends to have a favorable impact on Bitcoin by lowering borrowing costs. Consequently, we anticipate a recovery in market flows following the recent geopolitical tensions that have disrupted the financial landscape.”
</blockquote>
Lower borrowing costs typically drive more investment in riskier assets, such as cryptocurrencies and stocks. However, trader sentiment has not improved with the <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/why-is-bitcoin-price-down-today" rel="" target="_self" text="null" title="https://cointelegraph.com/news/why-is-bitcoin-price-down-today">latest inflation report</a>. 
The Bitcoin (<a data-ct-non-breakable="null" href="https://cointelegraph.com/bitcoin-price" rel="" target="_blank" text="null" title="https://cointelegraph.com/bitcoin-price">BTC</a>) price continued its <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/bitcoin-price-leave-60k-re-awaken-supply-market-analyst" rel="" target="_self" text="null" title="https://cointelegraph.com/news/bitcoin-price-leave-60k-re-awaken-supply-market-analyst">negative trend from the previous days</a>, down 1.6% and trading at $60,604 at the time of writing.&nbsp;
The Federal Open Market Committee (FOMC) is faced with a plate of mixed data to examine the path of the US economy. 
The Bureau of Economic Analysis reported that US gross domestic product <a data-ct-non-breakable="null" href="https://www.bea.gov/data/gdp/gross-domestic-product" rel="nofollow noopener" target="_blank" text="null" title="https://www.bea.gov/data/gdp/gross-domestic-product">grew</a> at a solid 3% annual rate between April and June. However, weekly jobless claims hit a 14-month high on Oct. 5, with 258,000 filings in the country.
Data from CME Group’s FedWatch gauge <a data-ct-non-breakable="null" href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html" rel="nofollow noopener" target="_blank" text="null" title="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html">shows</a> markets boosted odds to 89% that the Fed will lower rates by 25 basis points at its next policy meeting, scheduled for Nov. 6-7. Related: <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/fed-dovish-move-slash-625-m-in-interest-income-stablecoins" rel="" target="_blank" text="null" title="https://cointelegraph.com/news/fed-dovish-move-slash-625-m-in-interest-income-stablecoins">Fed’s dovish move will slash $625M in interest income for stablecoins</a>

CPI data to drive 'favorable impact' on Bitcoin prices — 21Shares

Cointelegraph

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