Bitcoin Surpasses $100,000-Mark As US Inflation Data Fuels US Federal Reserve Rate Cut Speculation

Bitcoin surged past the $100,000-mark on December 12, 2024 driven by the latest US inflation data that has fuelled speculation of a potential rate cut by the US Federal Reserve. The recent price surge of Bitcoin highlights its ongoing bullish momentum as market players react to changing macroeconomic conditions and expect the US Federal Reserve to adjust its monetary policy.

The latest inflation data for the US was in alignment with market expectations, creating optimism about a possible rate cut from the Federal Reserve in its upcoming meeting. Bitcoin hit an all-time high of $103,800 on December 5, 2024, briefly crossing the $100,000-mark for the first time. However, after hitting this mark, Bitcoin struggled to maintain its momentum.

On December 11, 2024, the cryptocurrency shot again by a further 5 per cent to $100,665 as it gained strength. By December 12, 2024, Bitcoin climbed further to $101,373, indicating positive market sentiment amid prospects of a possible rate cut by the Federal Reserve.

According to Bloomberg, Bitcoin has increased by around 50 per cent since former President Donald Trump was elected as the President-Elect in the recent US Presidential Election in November 2024. Trump’s pro-crypto stance, which is anticipated to reduce regulatory restrictions on the crypto industry, is largely responsible for this surge in crypto prices. Also, Bitcoin-focused exchange-traded funds (ETFs) have received $11 billion in inflows since Trump's election victory.

In the last 24 hours, the global crypto market rose 5.13 per cent, reaching a $3.64 trillion, despite a 22.39 per cent drop in trading volume to $219.12 billion, according to CoinMarketCap. While Bitcoin surged 2.94 per cent to $100,554, Ethereum rose 7.24 percent to $3,928. In addition to contributing to overall market growth, Bitcoin’s market value increased to $1.991 trillion.

According to WazirX, Bitcoin’s price surged to $101k, driven by US consumer price index (CPI) data aligning with market expectations, sparking anticipation of a Federal Reserve rate cut. This also elevated investor sentiment, with predictions of lower short-term interest rates influencing both the crypto and traditional stock markets.

WazirX said in a statement: “Strong spot market activity, rather than leveraged trading, is driving the rally. High volumes on platforms like Coinbase indicates real demand. It’s interesting to note that Bitcoin’s price has not immediately changed in response to Microsoft’s decision to exclude it from its reserves.”