Bitcoin recovers to $100,000 range again on hopes of easing inflation and new administration
Bitcoin prices recovered from a recent sharp drop below $90,000 on January 15th (US time), recovering above $100,000 amid a strong December Consumer Price Index (CPI) released by the US Department of Labor and rising expectations for deregulation by the incoming Trump administration.
The price of Bitcoin, the world’s most valuable digital asset, exceeded $100,700 at around 3:30 pm Eastern time on the 15th, according to TradingView data. It then temporarily fell to $99,500, but rose again and reached the $100,000 range around 7 pm.
Analysts point out that the rise is due to increased demand for risk assets following the release of the CPI on the 15th, and that the inauguration of President-elect Trump scheduled for the 20th could provide a boost to crypto assets.
Brett Scifling of asset management company Gerber Kawasaki commented, “The recent rise in Bitcoin prices appears to have been triggered by the release of the CPI.” “The Labor Department’s CPI data showed inflation trends were beating, which prompted investors to buy riskier assets as they expected the Fed would lean to a more accommodative stance,” he said, pointing to a 0.4% increase in December’s CPI from the previous month.
“However, this view is at odds with the strong employment report released on the 10th. Investors are hoping that these two reports will lead to a pause in interest rate hikes in 2025,” Sifling added.
Greg Magadini of digital asset data provider Amberdata also noted these economic statistics, noting that “financial conditions have been the biggest drag on U.S. risk assets and Bitcoin since the December FOMC.” He continued, “The recent inflation environment looks less severe,” noting that the core CPI released on the 15th increased 0.2% month-on-month, below the expected 0.3% increase.
“These macro outlooks, combined with expectations for Trump’s inauguration on the 20th, have provided a tailwind for crypto assets, with Bitcoin recovering to the $100,000 range,” Magadini said. He also commented on the trend in the derivatives market, saying, “The current price range is attractive to investors who trade options, and on the derivatives exchange Deribit, dealer inventory is concentrated around $100,000.
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