CPIrise time

- Increased expectations of interest rate hikes have led to price pressure: If the rise in CPI exceeds expectations, it will trigger concerns in the market about intensified inflation, prompting the Fed to have a stronger motivation to adopt tightening monetary policies such as interest rate hikes to curb inflation. Interest rate hikes will increase the cost of funds, causing funds in the market to flow from risky assets to safe assets such as fixed income. Bitcoin, as a risky asset, will face downward pressure on prices.
- The indirect impact of the strong dollar: Higher CPI data may push the dollar higher because expectations of interest rate hikes will attract international capital into the United States, increasing demand for the dollar. Bitcoin is priced in dollars, and a stronger dollar may lead to a relative decline in the price of bitcoin in the international market. For investors holding other currencies, the cost of purchasing bitcoin will increase, thereby suppressing demand.

When CPI falls

- Expectations of interest rate cuts drive prices higher: When CPI falls or is lower than expected, it indicates that inflationary pressures are easing, and the market expects the Fed to adopt loose monetary policies such as interest rate cuts to stimulate the economy. Interest rate cuts reduce the cost of capital, increase market liquidity, and increase investors' preference for risk assets. Bitcoin, as an asset with higher potential returns, will attract more capital inflows and push prices higher.
- Market confidence enhanced driving investment enthusiasm: The expectation of economic improvement brought by the decline in CPI will enhance investors' confidence and risk appetite. Investors are more optimistic about the outlook for the entire financial market and are willing to allocate more funds to risk assets, including Bitcoin, driving the rise in Bitcoin prices, and may attract more new investors to enter the Bitcoin market, further increasing demand and driving prices up.#创作者挑战赛