Bitcoin’s price on Wednesday climbed above $70,000 once again as consumer inflation figures for May slowed down on both annual and monthly basis, and fueled hope among investors that the Federal Reserve’s first rate cut could come soon.
The price of the world’s biggest cryptocurrency plummeted Tuesday to $66,000 for the first time in three weeks, with worries about the Fed’s monetary policy meeting mounting.
Bitcoin, however, strongly recovered Wednesday to hit $70,000 at 11.00 a.m. EDT (1500GMT) for a daily gain of 4.8%. Ethereum was up 3.8% to $3,641 at the time, while some altcoins saw their prices rising as much as 14% for the day.
The total value of the cryptocurrency market stood at $2.54 trillion with a 4% daily gain, while Bitcoin’s share, known as dominance, was at 54.3%. Ethereum’s was at 17.2%, according to CoinMarketCap.
The sudden recovery in cryptocurrencies came as consumer inflation in the US annually rose 3.3 % in May, coming lower than market estimates of a 3.4% gain, after increasing 3.4% in April year-on-year, according to the Labor Department figures released earlier.
On a monthly basis, the consumer price index showed no gain and also managed to come below the market expectation of a 0.1% increase, following a monthly gain of 0.3% in April.
The cooling inflation figures provide hopes for investors that the Fed could signal its first rate cut later Wednesday when its two-day meeting will conclude.