Following closely on the heels of U.S. President Donald Trump’s radical tariff policies, which have already bled the global stock and crypto markets dry, another major event is about to unfold any moment now that could significantly impact the crypto sector.
The U.S. Bureau of Labor Statistics is ready to release the Consumer Price Index (CPI) data for March 2025 today, Thursday, April 10, 2025, at 8:30 a.m. ET. It is released by the Bureau of Labor Statistics (BLS), around the middle of each month, to keep track of inflation in the U.S.
The CPI data monitors the inflation trends, potential shifts in monetary policies, and their direct influence the crypto markets and stocks. Every time CPI data is announced, the crypto market responds brusquely along with other financial markets.
In simple words, the consumer price index is like a barometer for the economy. It measures inflation by indicating the changes in prices of goods and services over time. It is a key method to measure changes in purchasing trends and inflation and government and financial institutions use this data to make decisions on interest rates.
The crypto market faced significant volatility in recent times due to Trump’s tariff policies. However, after he announced a 90-day pause on tariffs on Wednesday, it gave a much-needed breather to the market, bringing it back to stability.
It is in the context of current market events that makes CPI data more important.
Let’s delve deep into the topic and find how U.S. CPI data will affect the cryptocurrency market and what investors could expect from March CPI data.
How U.S. CPI Data Moves Cryptocurrencies??
U.S. CPI data is directly proportional to inflation. It measures inflation by tracking the price fluctuations in goods and services according to consumers’ perspectives. The data influences the monetary policy decisions that directly affect risky assets like cryptocurrencies and decides the fate of the crypto market.
First Scenario: Rise in U.S. CPI data indicated rise in inflation which means drop in purchasing power. In that situation, the circulation of money witnesses a significant change. Investors start pulling money out of riskier assets like crypto and other financial instruments. On the contrary, they invest in safer assets such as bonds, fixed deposits, savings accounts, and gold or Bitcoin, the cryptocurrency ‘digital gold’ for its ‘store of value’ feature, serving as hedging instrument.
Second Scenario: Fall in U.S. CPI data, as per expectations, could lead to fall in inflation, resulting into interest rate cuts by the Federal Reserve.
Historically, crypto investors had sharply reacted to the CPI data. For instance, February’s CPI print of 2.8% (down from January’s 3%) triggered a 2% Bitcoin rally to $83,510.
How Crypto Market is Expected to React to U.S. CPI Data?
Looking at previous month (February) U.S. CPI data, it was 2.8% year-on-year down from 3% in January, 2025. Moreover, according to crypto analyst Matthew Hyland, the upcoming March CPI data might show a major decline in inflation level- close to 2.5%.
Crypto Market Reactions
In examining potential scenarios for the cryptocurrency market in relation to the consumer price index , different outcomes can be anticipated based on CPI readings. If the CPI is at or below 2.5%, the market is likely to react positively and a bullish trend can be noticed, driven by expectations of the Federal Reserve rate cuts; seen in February 2025 when Bitcoin experienced an increase of 2%.
Conversely, the CPI reading between 2.6% and 2.7% may invite mixed reactions characterized by short-term volatility and neutral momentum; reflected in January 2025 when BTC fell by 4.17%.
Finally, if the CPI data rises to 2.8% or higher, a bearish market reaction is expected due to fears of delayed rate cuts and potential sell-offs in risky assets, a notable Bitcoin decline of 15% in December 2024.
Investors’ Preparations
According to CryptoQuant, a large amount of Bitcoin are deposited in Binance, one of the biggest crypto exchange. Binance Bitcoin reserve has increased by 22,106 BTC worth $1.82 billion, amounting to a total holding of 590,874 BTC in the last 12 days.
The exchange’s data demonstrates that investors are worried due to geopolitical tensions and uncertainties looming in the market. They are preparing for the forthcoming consumer price index data.
The transfer of funds to Binance articulates that investors are preparing to sell or trade immediately if the U.S. CPI data doesn’t align with market expectations.
Conclusion
Today’s U.S. CPI data release signifies a crucial event for the crypto market, especially following the recent volatility caused by Trump’s tariff policies. With analysts making their prediction, investors positioning themselves for potential market movements, every crypto participant seems ready to tackle the market.
The market reaction will likely depend on whether the CPI reading falls below expectations (bullish), meets expectations (mixed volatility), or exceeds expectations (bearish).
It is advised to take informed decision after thorough research, without getting panicked.
