Interest rate cut expectations rise, Bitcoin returns above $100,000
After the latest inflation data in the United States supported expectations for interest rate cuts, Bitcoin returned above $100,000, rising nearly 5% on Wednesday to $101,300. Trump's support for cryptocurrencies propelled Bitcoin to a historic high of $103,800 on December 5. The U.S. November CPI rose 2.7% year-on-year, in line with expectations, and traders raised the probability of a Federal Reserve rate cut in December to about 90%. Since the election victory on November 5, Bitcoin has risen about 50%
According to the Zhitong Finance APP, after the latest inflation data in the United States supported bets on the Federal Reserve cutting interest rates again, Bitcoin has risen above $100,000. On Wednesday, Bitcoin rose nearly 5%, marking its highest increase in two weeks. As of the time of writing, Bitcoin is priced at $101,300.
President-elect Trump’s support for cryptocurrency has driven Bitcoin to reach an all-time high of $103,800 on December 5. However, due to profit-taking by speculators, Bitcoin has struggled to maintain its position above $100,000 after setting the historical high.
Data released by the U.S. Bureau of Labor Statistics on Wednesday showed that the U.S. November CPI rose 2.7% year-on-year, in line with market expectations and slightly higher than October's 2.6%; it rose 0.3% month-on-month, matching market expectations. Excluding the volatile food and energy prices, the core CPI for November rose 3.3% year-on-year and 0.3% month-on-month, both unchanged from October and also in line with market expectations.
After the data release, traders increased their bets on a Federal Reserve rate cut in December. The CME FedWatch tool showed that the probability of a rate cut in December surged to about 90%, up from around 80% a day earlier.
Henry Elder, head of UTXO Management, stated, "The market likes to see inflation within expectations." He added that traders are trying to determine whether $100,000 is the upper or lower limit for Bitcoin's price.
During his campaign, Trump promised to establish a cryptocurrency-friendly regulatory body and supported the creation of a U.S. strategic Bitcoin reserve, vowing to make the U.S. the "cryptocurrency capital." Since his victory on November 5, Bitcoin has risen by about 50%. During the same period, the U.S. spot Bitcoin ETF attracted approximately $11 billion in net inflows