The Bitcoin (BTC) price experienced a strong rally above $26,000 when the United States Department of Labor released the latest Consumer Price Index (CPI) data for February 2023.
CPI went up 0.4% last month on a seasonally adjusted basis, with the department noting that the all-items index denoting inflation rose 6% in the past year. The Labor Department notes that inflation posted its smallest increase in 12 months since the period ending September 2021.
CNBC reported that mainstream markets were volatile following the release, while cryptocurrency markets reacted positively. Bitcoin experienced a price rally along with Ether (ETH), according to data from CoinMarketCap.
The CPI measures the average change over time in consumer prices for a basket of goods and services. It is calculated by the Bureau of Labor Statistics and is used as an indicator of inflation.
The CPI reflects consumer spending patterns on items such as food, housing, transportation, clothing, healthcare, and leisure. It is used to adjust wages, benefits, and social security payments for inflation, measure economic performance, and set monetary policy.
The statement from the US Department of Labor indicates that the housing index was the largest contributor to the monthly increase of all items, representing 70% of the increase in the CPI for February 2023. The food, leisure, household furnishings and operations also contributed.
The food index rose 0.4% last month, while the food at home index rose 0.3%. The energy index decreased 0.6%, while the natural gas and fuel oil indices also declined in February.
The broader cryptocurrency community offered a variety of opinions on March 14. Anthony Pompliano, co-founder and partner at Morgan Creek Digital, weighed in on the CPI update in a series of tweets, highlighting Bitcoin’s price appreciation in response to the latest inflation figures:
Bitcoin continues to accelerate in response to high inflation, a legacy banking crisis, and lack of predictability in the Fed’s response.
– Pomp (@APompliano) March 14, 2023
Bitcoin continues to accelerate in response to high inflation, the legacy banking crisis, and the lack of predictability in the Federal Reserve’s response.
Caitlin Longfounder and CEO of Custodia Bank and advocate of Bitcoin, highlighted the evolution of the price of BTC after a week load of turbulence in which entities like Silicon Valley Bank and Signature Bank were shut down by US regulators:
Bank regulators: “chancellor on the brink of a second bailout for banks”#Bitcoin: “hold my beer” (up >30% since SVB bank run Thursday) pic.twitter.com/LaxYqr035l
— Caitlin Long ⚡️ (@CaitlinLong_) March 14, 2023
Banking regulators: “Chancellor on brink of second bank bailout” #Bitcoin: “Wait a minute” (more than 30% up since SVB bank run on Thursday).
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