USD Inflation Grows for First Time in 8 Months as BTC Marks New ATHs

The trailing 12-month percentage change for all items in the Consumer Price Index (CPI) fell to 2.6% in October, according to the latest US Bureau of Labor Statistics data out Wednesday.

That may signal the beginning of a bull market in dollar-denominated assets across the board as the economy roars into 2025. The CPI measures the rate of gain or loss in dollar purchasing power over time. A higher CPI means prices for the typical basket of consumer goods are going up.

From March through September, the CPI fell steadily, prompting the US central bank to cut rates in September. After that, Bitcoin’s price began to rise through October, as well as Wall Street stocks.

US stock benchmarks like the S&P 500 Index set new all-time high records this month and last. After the US election held on Nov. 5, Bitcoin rocketed to a fresh peak. The largest digital asset marked a new all time high above $93,000 on Wednesday.

Fed Rate Cuts Whip Deflation

Cooling from 3.5% to 2.4% in Sept, the rate of change of year-over-year inflation fell 25.71% since March. Over that same time period, the S&P 500 gained 8.59%, while Bitcoin’s price fell -1.53%. Now that inflation is moving back up again, will BTC’s price continue to chart new all-time highs?

Santiment analysts said on Wednesday that they expect a Bitcoin rally deep into the six figures in 2025, as high as $150,000 or $200,000.

Last December, Bitcoin ETF issuer VanEck predicted a Bitcoin price of $100,000 by the end of 2024. The cryptocurrency appears poised to reach that milestone in the timeframe specified by two of the company’s analysts.

Are Stocks and BTC Re-Coupling?

As the dollar printer’s rising tide lifts up all worthy boats, daily movements in the prices of Bitcoin and stocks are beginning to correlate again.

The 30D BTC Pearson Correlation, after reaching a 44-month high of 0.89 (on a scale of -1 to 1) on Sept. 26, began to slide to 0.49 on the eve of the US elections. By the time of the Labor Department’s fresh CPI print on Wednesday, that figure bounced back to 0.80.

Part of the reason is that the same institutions are buying both with money hot off the press. Popular Bitcoin investment analyst Lark Davis remarked, “BlackRock just keeps buying.”

Between Nov. 6 and Nov. 13, Wall Street sold over $4.73 billion worth of Bitcoin ETFs. The institutional crowd cooled off on Thursday, with $400 billion in net outflows, but BlackRock’s investors were happy to buy the dip with $126 million in net BTC sales Thursday.

“BlackRock knows,” replied one Ethereum analyst on Davis’ thread.