Bitcoin showed strength as U.S. inflation rates slowed more than expected, easing concerns about further interest rate hikes from the Federal Reserve. This shift has been interpreted as a boost to investor sentiment in risk assets.
According to CoinMarketCap, Bitcoin was trading at $84,669, up 1.2% from the previous day as of 8 a.m. on October 2.
Major altcoins also experienced gains. Ethereum rose 0.43% to $2,701, while Ripple (XRP) increased by 0.15% to $1.49. Solana was up 0.01% at $118, and Binance Coin (BNB) rose 0.10% to $770.
The rise in the cryptocurrency market is attributed to signals of slowing inflation in the U.S. The Commerce Department reported that the Personal Consumption Expenditures (PCE) price index for August increased by 3.4% year-over-year, falling short of the market expectation of 3.7%. The core PCE price index, which excludes volatile food and energy prices, also rose by 3.0%, below forecasts.
With inflation pressures appearing weaker than anticipated, concerns about additional rate hikes from the Fed have eased. Comments from Fed officials suggesting a 'slower pace' of policy adjustments have likely contributed to improved investor sentiment.
Philip Jefferson, Vice Chair of the Fed, stated in a speech at the University of Virginia that future policy adjustments should be made cautiously, taking into account changes in economic indicators and forecasts. According to the Chicago Mercantile Exchange's FedWatch tool, the probability of a 0.25 percentage point rate hike at this month's Federal Open Market Committee (FOMC) meeting has dropped to 28.2%.
As concerns about rate hikes diminish, demand for risk assets like Bitcoin has increased. Typically, rising interest rates enhance the appeal of safe assets like bonds, while posing challenges for riskier investments such as cryptocurrencies.
In the domestic market, Bitcoin also showed strength. At 8 a.m., Bithumb reported Bitcoin trading at 1,153,790,000 won, up 0.68% from the previous day. The 'Kimchi premium,' which indicates the extent to which domestic prices exceed international prices, was recorded at 0.24%.
* This article has been translated by AI.
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