- US CPI data hit 2.7%, below the expected 2.9%, pushing Bitcoin to $119,000 and Ethereum past $4,400, lifting the crypto market.
- Lower inflation raises the chance (82.4%) of a Fed rate cut in September, which could keep crypto prices rising, per CME FedWatch.
- After an early market drop, CPI news drove a rally, with the total market value reaching $3.94 trillion.
The crypto market climbed today, August 12, 2025, after US CPI data hit 2.7%, below the expected 2.9%. Bitcoin soared past $119,000, Ethereum topped $4,400, and the total market value rose from $3.9 trillion to $3.94 trillion.
The lower inflation number has investors hopeful for a Federal Reserve rate cut in September, which could push crypto prices higher. Though the market dipped earlier, This report led to a quick rebound for major coins like Bitcoin, Ethereum, XRP, and Solana.
Lower CPI Raises Rate Cut Expectations
The Bureau of Labor Statistics said July’s inflation stayed at 2.7% year on year, with monthly inflation dropping from 0.3% to 0.2%. Core CPI, excluding food and energy, rose to 3.1%, a five month high, but didn’t dim the market’s optimism.
Trading View data shows prices jumped post release, with Ethereum leaping from $4,172 to over $4,400, a 5% gain. Bitcoin hit $119,200, though its trading volume dropped 13%, hinting at quieter action.
The market’s cheer stems from a stronger chance of a Fed rate cut. CME Fed Watch shows an 82.4% likelihood of a 25 basis point cut in September, compared to 17.6% for holding rates steady. Lower rates often bring more cash into risky assets like crypto, driving the excitement.
Fed member Michelle Bowman is pushing for cuts, citing a weaker job market, and even suggested three cuts this year. But Kansas City Fed’s Jeff Schmid prefers holding rates to avoid stoking inflation.
The market was rocky earlier, crashing before the CPI news. Analysts predicted a rally if inflation was 2.8% or lower, and they nailed it. With a soft labor market and stable CPI, a rate cut appears imminent, with investors remaining optimistic.
If the Fed eases rates, Bitcoin, Ethereum, and others may continue to rise as funds pour in. Crypto’s floating high for now, with the Fed’s September move being watched.
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