The price of Bitcoin (BTC) saw a sharp uptick over $26,000 as the United States Department of Labor released the latest Consumer Price Index (CPI) data for February 2023.
CPI rose 0.4% last month on a seasonally adjusted basis, with the department noting that the all-items index denoting inflation increased by 6% over the last year. The Labor Department notes that inflation saw its lowest 12-month increase since the period ending September 2021.
CNBC reported that conventional markets were volatile following the release, while cryptocurrency markets reacted positively. Bitcoin saw a surge in price alongside Ether (ETH), according to data from CoinMarketCap.
CPI measures the average change over time in consumer prices for a basket of goods and services. It’s calculated by the Bureau of Labor Statistics and is used as an indicator of inflation.
CPI reflects the spending patterns of consumers on items such as food, housing, transportation, clothing, medical care and recreation. It’s used to adjust wages, benefits and social security payments for inflation, measure economic performance and set monetary policy.
The U.S. Labor Department’s statement notes that the shelter index was the largest contributor to the monthly all-items increase, accounting for 70% of February 2023’s CPI increase. Indexes for food, recreation, household furnishings and operations also contributed.
The food index increased 0.4% last month, while the food at home index rose 0.3%. The energy index decreased by 0.6%, while natural gas and fuel oil indexes also declined in February.
The broader cryptocurrency community offered a variety of takes on March 14. Anthony Pompliano, co-founder and partner of Morgan Creek Digital, weighed in on the CPI update in a series of tweets, highlighting Bitcoin’s price appreciation in response to the latest inflation numbers:
Bitcoin continues to accelerate in response to high inflation, a legacy banking crisis, and lack of predictability in the Fed's response.— Pomp (@APompliano) March 14, 2023
Bitcoin proponent and Custodia Bank founder and CEO Caitlin Long, highlighted BTC’s price performance in the wake of a tumultuous week that saw the likes of Silicon Valley Bank and Signature Bank closed by U.S. regulators:
Bank regulators: "chancellor on the brink of a second bailout for banks"#Bitcoin: "hold my beer" (up >30% since SVB bank run Thursday) pic.twitter.com/LaxYqr035l— Caitlin Long ⚡️ (@CaitlinLong_) March 14, 2023