Bitcoin and Ethereum rose on Thursday after new US inflation data showed consumer prices rose less than economists expected last month.
Both cryptocurrencies rose before the US stock markets opened, with Bitcoin trading near $89,000 and Ethereum approaching $2,980. After the opening bell, prices fluctuated and failed to hold at those levels.
At the time of writing, Bitcoin was trading around $88,399, down around 1.6% over the past seven days. Ethereum was trading near $2,957, down about 6.8% over the same period. Both assets were up just over 1% on the day.
Inflation data shows slower price growth
Data released by the US Bureau of Labor Statistics showed that consumer prices rose 2.7% year-on-year in November. The reading was below forecasts, which had projected a larger annual increase, and marked the slowest pace since July.
Core consumer prices, which exclude food and energy costs, rose 2.6% from a year earlier. This is the lowest annual core inflation rate recorded since March 2021.
The inflation report was released later than expected after a government shutdown disrupted the release of earlier economic data.
Initial gains fade after market opens
Following the release of inflation data, Bitcoin and Ethereum rose during the first hours of trading. After the US stock markets opened, prices moved within a tighter range and gave up some of the previous rise.
Trading conditions in December are typically weaker than during other parts of the year, with fewer participants and shorter holding periods. These conditions can result in uneven price action, particularly in assets that already trade with greater volatility.
Lower inflation reduces pressure for further interest rate increases, but digital asset prices did not continue to rise during the session.
Regulatory evolution remains the focus
Ethereum trading has taken place alongside the ongoing debate in Washington over the regulation of digital assets. Lawmakers continue to debate proposals that would define the oversight and structure of the cryptocurrency market, although no timeline has been set for their approval.
Recent public comments by American political leaders have indicated an openness to bipartisan participation in financial regulatory agencies that oversee securities and derivatives markets. At the same time, lawmakers have said progress on digital asset legislation depends on cross-party agreement.
Rate cut odds adjust modestly
After the inflation data was released, market prices showed a slightly higher probability that the Federal Reserve could reduce its benchmark interest rate at its next meeting. Traders estimated a roughly 26% chance of a quarter-point decline, up slightly from the previous day.
Bitcoin and Ethereum remained near recent trading levels during the session as markets digested inflation data and adjusted interest rate expectations.
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