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Bitcoin Nears $100K Amid Inflation Surge and Fed Policy Shifts

Bitcoin rallied to $99,000 as inflation rose to 2.9% in December. Analysts predict renewed support for risk assets, including crypto, driven by changing Federal Reserve rate policies.

• Main Points:

  • Inflation Data: December’s Consumer Price Index (CPI) increased by 2.9% year-over-year.

  • Bitcoin Price Surge: Bitcoin gained 1.9% post-inflation data, nearing $100,000.

  • Federal Reserve Actions: A 50-basis-point rate cut marks the Fed’s first easing in four years.

  • Market Reactions: Core inflation dipped to 3.2%, boosting optimism for additional rate cuts.

• Detailed Insights:

  • Inflation Trends: U.S. CPI rose 2.9% annually, exceeding November’s 0.2% monthly growth rate.

  • Crypto Market Impact: Bitcoin and Ethereum prices surged, reaching $99,799 and $3,300, respectively.

  • Fed’s Position: A potential shift in monetary policy suggests more supportive conditions for risk assets.

  • Core Inflation: December’s core CPI fell to 3.2%, below expectations of 3.3%.

  • Economic Context: Analysts highlight reduced expectations of further rate hikes in 2025.

Related: Bitcoin Inflows Under Trump Ignite New $249K BTC Price Target for 2025

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Bitcoin Open Interest Surges $500M Following Inflation Data

Binance sees a $500M spike in Bitcoin Open Interest (OI) within hours of favorable US inflation data. The CPI report boosts market optimism and fuels bullish sentiment in crypto.

• Main Points:

  • Bitcoin OI Jumps Post-CPI Release: Binance OI increases by $500M within two hours of CPI data.

  • Crypto Markets Rally: Favorable inflation figures spark optimism, lifting Bitcoin prices and market sentiment.

  • Increased Market Activity: Total Bitcoin OI across exchanges hits $63.19B, indicating strong trader interest.

  • Bullish Sentiment Climbs: Crypto Fear & Greed Index rises to 75 (“Greed”).

• Detailed Insights:

  • CPI Boosts Crypto Optimism: December’s CPI report shows lower-than-expected core inflation, signaling potential rate cuts in 2025.

  • Binance Leads Bitcoin OI Growth: Binance’s Bitcoin OI reaches $12.20B, with $3B growth across exchanges in 24 hours.

  • Bitcoin Price Reaction: BTC rises from $96,000 to $100,500 before stabilizing at $99,587.

  • Sentiment Tracker Update: Crypto Fear & Greed Index jumps 5 points, reflecting rising confidence in the market.

  • Analyst Viewpoint: Fundstrat Capital’s CIO notes current Bitcoin prices present a solid buying opportunity despite short-term caution.

Related: XRP Soars 12% Amid Whale Accumulation and ETF Speculation

Nation Considers Bitcoin ETFs for Foreign Reserves, Says Bitwise CEO

Bitwise CEO Hunter Horsley revealed that a national government is exploring Bitcoin ETFs for foreign reserves, signaling a potential shift in traditional reserve management. This aligns with Bitcoin’s growing recognition as a viable asset class.

• Main Points:

  • Nation Explores Bitcoin ETFs: Unnamed government considers shifting foreign reserves into Bitcoin ETFs.

  • Bitcoin ETFs’ Market Growth: U.S. Bitcoin ETFs have reached $113.45 billion in assets under management (AUM).

  • Broader BTC Integration: Legislative moves, such as Oklahoma’s “Bitcoin Freedom Act,” further BTC adoption.

  • Market Impact: BTC surpasses $100,000 amid optimism over regulatory easing under Trump’s administration.

• Detailed Insights:

  • Shift in Reserve Strategy: Traditional reserves include U.S. Treasuries and euros; Bitcoin represents a bold alternative.

  • Spot Bitcoin ETF Anniversary: ETFs approved in Jan. 2024 now boast $113.45 billion AUM; BlackRock’s iShares Bitcoin Trust leads with $53.46 billion.

  • BTC as Digital Gold: Fed Chair Powell likened Bitcoin to gold, underscoring its rising status as an asset class.

  • Regulatory Momentum: Oklahoma’s proposed law could allow BTC salaries and business payments, showcasing legislative support.

  • Bullish Sentiment: Bitcoin’s price rise from $69,000 to over $100,000 reflects confidence in pro-business policies.

Related: “Rich Dad Poor Dad” Author Says Wealth Is Just a HODL Away

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This article is not financial advice. Market conditions can change rapidly, and past performance does not guarantee future results