Bitcoin Surges as Fed Leaves Rates Unchanged

Global markets were buoyed as U.S. inflation data for May came in cooler than expected.

By: Mehab Qureshi Loading...

Bitcoin symbol with an upward-trending arrow

Crypto markets rallied on Wednesday as the Federal Reserve left interest rates unchanged.

Bitcoin jumped by 3% to $69,000, while Ethereum, Solana, and Polkadot increased between 2% and 6%, as per CoinGecko data.

BTC Price chart
BTC Price

The consumer price index (CPI) for May remained unchanged, contrary to the Dow Jones estimate, which forecasted a 0.1% increase.

“The all items index rose 3.3 percent for the 12 months ending May, a smaller increase than the 3.4-percent increase for the 12 months ending April.” read an official press release from the U.S. Bureau of Labor Statistics.

Michaël van de Poppe, founder and CEO of trading firm MN Trading, pointed out the drop in the U.S. dollar following the data release.

“The Dollar and Treasury Yields are dropping significantly as the markets are expecting rate cuts to be happening,” he said. “This could be the massive sign for Altcoins and Bitcoin.”

Over the past 24 hours, 76,825 traders were liquidated, with total liquidations amounting to $195 million, according to data from crypto analytic firm CoinGlass. The largest single liquidation occurred on OKX, involving an ETH/USDT swap valued at $5.21 million.

On June 11, a net $200 million flowed out of Bitcoin spot ETFs, marking a second consecutive day of outflows. The Grayscale Bitcoin Trust (GBTC) alone accounted for $121 million of outflows. Consequently, the total net asset value of Bitcoin spot ETFs has dipped below $60 billion, according to data from Sosovalue.

Meanwhile, the cooler-than-expected inflation report also caused the U.S. stock market to surge.

The S&P 500 increased by 0.9%, while the Nasdaq Composite rose by 1.2%. The Dow Jones Industrial Average is trading flat.

U.S. Treasury yields dropped sharply on Wednesday morning following the CPI report, suggesting that traders are anticipating that the Federal Reserve will cut rates later this year in response to cooling inflation.