- Bitcoin is nearing the $100,000 threshold as the crypto market saw a resurgence following the release of December US CPI data.
- Inflation met expectations in December, rising 2.9%, while core CPI rose to 3.2%.
- XRP, Stellar, and AVAX rallied alongside several meme coins and AI tokens.
Bitcoin and the broader crypto market posted rapid gains on Wednesday, adding nearly $100 billion in market capitalization after the release of December U.S. Consumer Price Index (CPI) data rose at 2.9%.
Bitcoin Rises as CPI Data Drives Crypto Market Recovery
US CPI data for December sparked a rally in crypto assets, with headline CPI rising to 2.9% from 2.7% in November. The annual core CPI figure also stood at 3.2% in December, although it fell short of expectations for a 3.3% increase.
“The core CPI, which excludes volatile food and energy prices, rose 3.2% on an annual basis – below November’s gain and analysts’ estimates of a 3.0% increase. 3%. Monthly core CPI rose 0.2% in the final month of 2024,” FXStreet reported.
Lower-than-expected CPI baseline data sparked buying activity in the crypto market, with Bitcoin rallying near $100,000 for the first time since January 7.
Bitcoin’s rally matches movements in traditional risk assets like stocks. The S&P 500 rose 1% following the release of inflation data.
Likewise, several altcoins saw gains as the market began its recovery. XRP, Stellar (XLM), and Avalanche (AVAX) jumped 14%, 15%, and 9%, respectively, before experiencing a slight decline.
Other sectors were not left out, notably those of AI and memes. AI token Virtual Protocol (VIRTUAL) and AI meme coin ai16z (AI16Z) were among the biggest gainers, rising about 24% and 18%, respectively.
The recent rally marks a recovery from last week’s crypto market plunge, which began after the Federal Reserve (Fed) issued a commentary on its outlook for 2025. Losses extended into the weekend. end following the release of US non-farm payrolls (NFP) data.
Separately, the US government released a statement saying that 94,643 BTC worth $11.8 billion, confiscated after the Bitfinex hack in 2016, should be returned as in-kind restitution.
Bitfinex was identified as the sole victim of the hack, carried out by the couple Lichtenstein and Morgan, who pleaded guilty to money laundering in 2023. The two men initially laundered nearly 120,000 Bitcoins in 2016 and spent nearly 25 000 BTC before being discovered.
