USD Inflation Rises for First Time in 8 Months, BTC Hits New Highs: Are Stocks and Crypto Reconnecting?
💵 Inflation Rebound:
The U.S. inflation rate climbed to 2.6% in October, reversing an eight-month decline from 3.5% in March, according to the latest Consumer Price Index (CPI) data from the Bureau of Labor Statistics. This marks a potential shift in economic trends, as inflation growth coincides with Bitcoin’s and Wall Street's bullish movements.
📈 CPI and Market Dynamics:
The CPI tracks changes in the purchasing power of the dollar. After a steady decline from March to September—prompting the Fed to lower rates—stocks and Bitcoin began gaining momentum in October. The S&P 500 reached new all-time highs, while Bitcoin surged past $93,000 this week.
🔄 Re-Coupling of BTC and Stocks?
Recent data suggests Bitcoin and equities may be re-establishing a stronger correlation. The 30-day BTC Pearson Correlation, which measures the relationship between Bitcoin and stocks, rebounded from 0.49 pre-election to 0.80 this week, indicating renewed alignment between these markets.
🏦 Institutional Influence:
Institutional players, including BlackRock, are heavily involved in both Bitcoin and equities. BlackRock recently added $126 million in Bitcoin amidst broader market outflows. Analysts expect Bitcoin’s bullish trajectory to continue, with forecasts of $150,000–$200,000 by 2025.
🔮 What’s Ahead?
As inflation rises and the Federal Reserve considers its next steps, the interplay between stocks, Bitcoin, and the broader economy will be key. Could this be the start of a synchronized bull run?
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