Bitcoin and Ethereum Surge as March Sees Significant Decline in Inflation

On Thursday, Bitcoin’s value increased as a key U.S. inflation indicator revealed that consumer prices had risen significantly less than anticipated last month.

According to the Bureau of Labor Statistics, the Consumer Price Index (CPI) rose by 2.4% over the 12 months leading up to March. Economists had projected a 2.6% annual rise for the index, which tracks price fluctuations for a wide array of goods and services.

The core inflation rate, excluding the volatile food and energy prices, climbed by 2.8% over the same 12-month period, also falling short of economists’ forecasts. This represented a noteworthy decrease from February when core inflation climbed 3.1% annually.

David Hernandez, a crypto investment strategist at asset management firm 21Shares, told Decrypt, “This brings some positive news for both equities and Bitcoin. The CPI report next month will be crucial to understand the complete effects of tariffs that weren’t factored into President Trump’s recent suspension affecting certain countries.”

The CPI’s rise in March was attributed to a surge in new vehicle prices, though this increase was somewhat mitigated by a decline in used car prices and truck prices.

Businesses have been keenly observing how consumers react to the likelihood of increased prices amid Trump’s trade policies. Notably, consumer prices fell by 0.1% from February, marking the first month-to-month decrease since 2020, as reported by the BLS.

Bitcoin was trading at approximately $82,000, reflecting a 7.5% gain over the last day and a 0.2% increase within the past hour, according to data from CoinGecko. Prices for Ethereum and Solana also rose by 11%, hovering at around $1,600 and $114, respectively.

The inflation report on Thursday came in the wake of President Donald Trump’s decision to postpone tariff increases on most countries for 90 days, a move that immediately reassured the markets after the recent uncertainty surrounding trade policies.

Trump reduced his “reciprocal” tariff rate to 10% for 90 nations involved in his “Liberation Day” proclamation, while simultaneously elevating tariffs on Chinese imports to 125%, targeting one of America’s largest adversaries and trading partners.

Recently, Trump introduced 25% tariffs on foreign cars and auto parts, which were implemented a week ago and remain unchanged.

According to BRN analyst Valentin Fournier, Trump’s trade maneuvers have provided markets with much-needed clarity, fostering a trade rally based on the hope that negotiations with other nations might prevent the conflict from escalating further.

“The potential for continued negotiations could support a stable upward trend,” he noted in a Thursday report. “The worst-case scenario of a trade war has been momentarily put on hold.”

The Federal Reserve has recently adopted a wait-and-watch stance as it assesses how Trump’s tariffs might influence its ability to combat inflation. Concerns about the implications of Trump’s trade strategy on price pressures were first raised by the U.S. central bank in December.

Despite Thursday’s inflation report still being above the Fed’s 2% target, it marked the second consecutive month where both the CPI and the core measure declined.

Editor’s note: Updated to include a statement from David Hernandez of 21Shares.

Edited by Stacy Elliott.