Inflation Strikes Again! Here’s Why Bitcoin Is Crashing Today

The impact of the latest data on American inflation was immediately felt in the crypto market this Wednesday, February 12, 2025. Bitcoin fell below the $95,000 mark following the announcement of inflation that exceeded expectations, while Donald Trump continues to pressure for a decrease in interest rates.

Bitcoin falls after a surprise announcement from the Fed

The American Bureau of Labor Statistics released inflation figures for January 2025 this Wednesday, February 12. The Consumer Price Index (CPI) shows a monthly increase of 0.5%, exceeding the analysts’ predictions by 0.2%. Year-over-year, inflation now stands at 3%, which is 0.1% above estimates.

This monthly inflation increase is the most significant observed in a year, which worries investors. The crypto market, particularly sensitive to macroeconomic data, reacted negatively to this news immediately. Bitcoin fell below $95,000 as soon as these figures were announced.

Analysts from Steno Research highlight that this situation could lead to increased bitcoin sales, as periods of rising inflation are generally unfavorable for assets considered risky.

Tensions between Trump and the Fed over monetary policy

In this tense economic context, Donald Trump reiterated his position on Truth Social, his social media platform, calling for a reduction in interest rates. “Interest rates should be lowered, which would go hand in hand with the upcoming tariffs! Let’s Rock and Roll, America!”, said the former president.

This statement comes on the heels of comments from Jerome Powell, the Fed chairman, who stated that the central bank does not see the urgency to lower rates. “Our monetary policy is now significantly less restrictive than before and the economy remains strong, we do not need to rush to adjust our monetary policy,” he explained.

Nic Puckrin, founder of The Coin Bureau, provides interesting insight into the situation. According to him, the rise in inflation in January is partly due to seasonal factors and should not influence the Fed’s decision on rates in March. He suggests that the Fed will focus more on the unemployment figures expected on March 7 and on the PCE index (personal consumption expenditures) scheduled for February 28.

In summary, bitcoin is facing several challenges: higher-than-expected inflation, disagreements over U.S. monetary policy, and growing trade tensions between the U.S. and China. These factors maintain a strong uncertainty in the crypto markets.