Bitcoin Rises as Cooling Inflation Lifts Crypto Prices

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Bitcoin
and other cryptocurrencies were rising Wednesday after U.S. inflation slowed in July, taking some pressure off the Federal Reserve which has been raising interest rates to slow down the economy.

Bitcoin, the world’s largest cryptocurrency, has risen 3.1% over the past 24 hours to $23,965. Wednesday’s gains added to its four-day winning streak.

Ether
 — the second-largest token — jumped 6.3% to $1,817. Smaller cryptos, or altcoins, rose, with 

Solana
 up 1.7% and and 

Cardano
 up 2.3%.

Dogecoin
 gained 0.6%.

The consumer price index, released Wednesday, showed prices climbing at an 8.5% annual pace in July, but that was sizable slowdown from June as falling energy prices brought down the cost of gasoline and offset rising food and shelter costs.

Craig Erlam, senior market analyst at Oanda, said before the inflation report that a “softer inflation number could be just the catalyst Bitcoin needs” to gain momentum and turn higher.

Bitbank analyst Yuya Hasegawa agreed with Erlam, saying Bitcoin “will likelyturn around and recover if the CPI decreases from the previous month as the market expects.” Hasegawa had called Wednesday “one of those ‘make or break’ situations for Bitcoin,” Hasegawa said.

The cooler-than-forecast inflation could lessen the chances of another three-quarter point rate hike from the Fed in September. The Fed has raised rates four times this year, the last two by 0.75 percentage point.

Write to Joe Woelfel at joseph.woelfel@barrons.com