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Bitcoin’s price has climbed after U.S. data showed that inflation was stickier than expected in April. Consumer prices were 3.4% higher in April than they were this time last year. That's a marked slow down in rising prices compared to March's 3.7%, according to the U.S. Bureau of Labor Statistics.
Immediately after BLS released its new Consumer Price Index data, the Bitcoin price now stands at $63,142, CoinGecko data shows. That’s a 3% gain in the past 24-hour period and 1.4% higher than it was an hour ago.
And the price of Ethereum, the second-biggest digital asset by market cap, is now $2,944.94—which is a 1.8% increase compared to this time yesterday and 2% hours than it was an hours ago.
The CPI report measures price changes in a basket of common consumer goods and services and is used to estimate changes in the economy’s inflation rate. In today's report, which contains data for consumer prices in April, the BLS reported that housing and gas prices were the two biggest factors in rising prices.
"Combined, these two indexes contributed over seventy percent of the monthly increase in the index for all items," the BLS wrote in its summary.
Economists initially expected the Fed to lower interest rates early this year but now many think a cut will come by September, a Reuters survey showed this week.
U.S. equities—particularly tech stocks—rose, with the NASDAQ-100 Technology Sector Index (NDXT)
gaining 72 points to trade 0.72% higher than it was this time yesterday. Meanwhile, the S&P 500 has gained 0.48% ahead of markets in the U.S. opening.
Bitcoin in March touched a new high of nearly $74,000 per coin. Its surge was off the back of the January approved spot Bitcoin exchange-traded funds (ETFs), which have led to a flood of capital into the market.
But data showing inflation is not going away and therefore the Fed is in no hurry to lower historically high interest rates have stalled the asset’s run. When interest rates are high, investors tend to “de-risk” and avoid assets like Bitcoin.
As a result, the virtual coin has this month and last been trading well below its 2021 record of $69,044.
Experts previously told Decrypt that the price of Bitcoin would continue running if interest rates drop.
Edited by Stacy Elliott.