Bitcoin Breaks Above $84K as US Inflation Cools in February

Bitcoin sees a mild bump on cooler than expected February 2025 inflation numbers.

Reprieve continues to trickle in for risk markets like crypto. First, Ukraine agreed to a U.S. ceasefire deal in its conflict with Russia. Now, it is cooler than expected February 2025 inflation numbers.

Are interest rate cuts coming?

Cooler Than Expected Numbers

In the past few minutes, Bitcoin, the largest crypto asset by market cap, has seen a mild rally that has taken its price above $84,500.

The bump comes as U.S. inflation numbers for February 2025 came in less than expected across the board, stoking hopes of a dovish Fed turn that could bolster capital inflows to risk assets.

Specifically, the annual Consumer Price Index (CPI) came in at 2.8%, the lowest since November 2024, less than January 2025’s 3% print, and less than the projected 2.9%.

At the same time, the monthly rate rose only 0.2% in February 2025, the lowest since October 2024. This was less than January 2025’s 0.5% print and less than the expected 0.3%.

Moreover, Core CPI, which excludes more volatile items like food and gas and is more closely watched by the Fed, rose 3.1% annually, dropping from 3.3% in January 2025, and coming in below expectations of 3.2%. It is also the lowest print since April 2021. 

The metric rose only 0.2% month-on-month (MoM), below the anticipated 0.3%.

While market watchers expect the Fed to keep interest rates stable in the 4.25% to 4.5% range following the March 19 Federal Open Market Committee meeting (FOMC), recent data could bolster hopes of cuts in May 2025 and June 2025. 

At the time of writing, the FedWatch Tool suggests a 32% chance of cuts in May and an over 76% chance of cuts in June.

Hopes of rate cuts have likely also been bolstered by recent recession fears stoked by President Donald Trump’s tariff policies. Should this materialize, it could trigger capital inflow into risk assets like Bitcoin, bolstering price action.