- Bitcoin surged over 3% to $84,100 after U.S. CPI data showed inflation at 2.8% in February.
- CPI report reveals inflation slowed to 2.8%, easing fears of aggressive Fed rate hikes.
- Bitcoin’s rally follows lower CPI data, boosting investor confidence in risk assets.
Bitcoin saw a major upward trend on March 12, 2025 after the release of the February U.S. Consumer Price Index (CPI) data. Financial markets showed optimism with the annual inflation rate of 2.8% slightly below the forecasted 2.9%. Bitcoin reached a new price peak at $84,100 shortly after the U.S. announcement and gained over 3%. Stock indexes also rose as the Nasdaq 100 and S&P 500 experienced increased values.
The CPI data showed that inflation grew by 0.2% in the month, which was lower than the projected 0.3%. This was a significant drop from 0.5% in January. Analysts predicted these sluggish inflation rates fueling speculation that the Federal Reserve may cut interest rates. These economic conditions require close monitoring in both traditional and crypto markets because inflation has stayed above 2% but shows indications of slowing down.
The U.S. Bureau of Labor Statistics reported annual inflation at 2.8%, down from the previous year’s rate, while the Federal Reserve keeps its 2% target as the upper limit. The persistent inflationary pressures continued to drive up food costs, particularly grocery items. The Fed maintains a reserved approach towards lowering interest rates because rising food and shelter costs continue to exist despite reduced inflation. Market participants will monitor the forthcoming Producer Price Index (PPI) report to assess inflation development patterns.
Bitcoin’s Surge and Market Sentiment Amid Inflation Data
Bitcoin surged past $84,000 after the CPI announcement as investors took on more risk across crypto and traditional markets. The cryptocurrency market showed an upward trend following the CPI release since it moved in the opposite direction of traditional market losses.
Investor confidence in Bitcoin as a speculative asset intensified after the Federal Reserve rate cut speculation became possible due to the released data. As inflation fears ease, investors are becoming more willing to take on risk, driving up the price of Bitcoin and other digital currencies.
Related: Bitcoin Falls Below $80K as Crypto & S&P 500 Plunge
In contrast, traditional markets had a more tempered reaction. Despite a modest rally in the Nasdaq 100 and S&P 500, they remain significantly below their previous highs. The S&P 500 experienced a disappointing performance during the first three months of 2025, when it lost 9% in value, marking its worst presidential start since 2009.
Historically, Bitcoin has acted as a hedge against traditional markets, but recent movements suggest it is mirroring stock market declines. Statistical experts anticipate Bitcoin’s market rebound mainly because of anticipated Federal Reserve rate cut policies.
