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Bitcoin extended its rebound on Wednesday, hovering just below $100,000 after another encouraging inflation report fueled investors’ risk appetite.
The price of the flagship cryptocurrency was last higher by more than 2% at $99,034.55, bringing its 2-day gain to about 7%, according to Coin Metrics.
The CoinDesk 20 index, which measures the broader market of cryptocurrencies, gained 5%.
Bitcoin approaches $100,000 after Wednesday’s CPI data
Shares of Coinbase gained 6%. Bitcoin proxies MicroStrategy and Mara Holdings each gained about 5%.
Wednesday’s move followed the release of the December consumer price index, which showed core inflation unexpectedly slowed in December. A day earlier, the market got another bright inflation reading in the producer price index, which showed wholesale prices rose less in December than expected.
The post-election crypto rally fizzled into the end of 2024 after Federal Reserve Chair Jerome Powell sounded an inflation warning on Dec. 18, and bitcoin suffered even steeper losses last week as a spike in bond yields prompted investors to dump growth-oriented risk assets. This Monday, bitcoin briefly dipped below $90,000.
The price of bitcoin has been taking its cue from the equities market in recent weeks, thanks in part to the popularity of bitcoin ETFs, which have led to the institutionalization of the asset. Bitcoin’s correlation with the S&P 500 has climbed in the past week, while its correlation with gold has dropped sharply since the end of December.
