Bitcoin Price Rises After CPI Inflation Report. Why the Data Matter for Crypto. — Barrons.com

By Elsa OhlenBitcoin rose early Wednesday as investors reacted to the latest U.S. inflation reading.The world's largest cryptocurrency was up 2.9% over the past 24 hours to $99,032, according to CoinDesk data. It is up more than 40% since Nov. 5 when President-elect Donald Trump won a second term in the White House, promising a more friendly regulatory regime for digital currencies.Still, the crypto rally has been somewhat hampered over the past month as investors fret over the risk of the Federal Reserve keeping interest rates higher for longer. Prices of cryptocurrencies typically suffer when interest rates are elevated because high borrowing costs make riskier investments, such as crypto, less appealing.The Bureau of Labor Statistics released the December consumer price index on Wednesday. The report showed that the annual rate of inflation was 2.9% last month, meaning it is still running well above the Fed's 2% target.While headline inflation did tick up and came in above expectations of 2.8%, core inflation, which excludes energy and food prices, declined. In respond, interest-rate futures showed greater odds of multiple rate cuts this year, a positive for cryptocurrency investors.Among other digital coins, XRP jumped 15% on hopes of a positive development in the legal case between the Securities and Exchange Commission and Ripple. Ripple owns and operates the payment platform on which XRP is used.Ether was up 4.4%, while Solana and Dogecoin both climbed 5.4%.Write to Elsa Ohlen at [email protected] content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.