Bitcoin Rises To IDR 1.6 Billion After US CPI Data Release

Illustration. (Photo: Unsplash)

JAKARTA - The price of Bitcoin (BTC) jumped significantly after the release of the United States Consumer Price Index (CPI) data for December 2024. The annual inflation was recorded at 2.9 percent, according to market expectations.

This prompted the value of Bitcoin to exceed US$102,000 or equivalent to more than Rp1.6 billion. This increase was also followed by other crypto assets during the announcement of CPI, such as Ethereum (ETH) which reached Rp54 million, XRP at Rp50 thousand, SOL at Rp3.2 million, and XLM at Rp7 thousand. The majority of other crypto assets also experienced an upward trend, strengthening market optimism.

Bitcoin's market capitalization is now at 3.7 trillion US dollars, with total trading volume reaching 183 billion US dollars. In comparison, in the previous month, CPI was recorded at 2.7 percent, where the price of Bitcoin was in the range of 90,000 US dollars, up from the previous 87,000 US dollars. Although the increase in the December CPI was slightly higher than last month's figure, this shows no signs of worsening inflation.

As a note in addition, core CPI -- which does not take into account food and energy prices -- only increased 0.2 percent, lower than the initial estimate of 0.3 percent. This data provides a positive signal that inflationary pressure remains under control.

With moderate inflation, there is potential for the Federal Reserve to consider easing interest rate policies in the coming months, which could further boost positive sentiment in the financial market.

This optimism is also reflected in the Fear and Greed Index of the crypto market, which is at 75 out of 100. This figure shows the dominance of "greed" sentiment or strong optimism among investors. If this trend continues, it is possible that Bitcoin will continue its psychological level above $102,000 in the near future.

INDODAX CEO, Oscar Darmawan, believes that this spike reflects the stronger investor confidence in Bitcoin as a hedge asset.

"We see the same pattern: when inflation starts to stabilize and monetary policy tends to soften, Bitcoin gets momentum increases. With the Fed's inflation target at 2%, there is almost no chance of cutting interest rates by the end of the month," he said, in a written statement, Wednesday, January 22.

According to Oscar Darmawan, the Fed's decision will greatly affect the movement of Bitcoin and other crypto assets.

"The market is very sensitive to monetary policy. If the Fed gives a signal it will lower interest rates, liquidity will increase, and Bitcoin could be one of the most profitable assets," he explained.

In addition, the Producer Price Index (PPI) data which will be released on January 24, 2025, is expected to provide additional signals regarding inflationary pressures that are starting to subside. Oscar believes that this factor will strengthen bullish sentiment for Bitcoin.

"Institutional investors are now more confident in bringing Bitcoin into their portfolio. When inflation and monetary policy are starting to stabilize, demand for crypto assets tends to increase," he added.

Oscar emphasized that global regulation is also an important factor in Bitcoin movement.

"With more and more countries starting to accept Bitcoin as a legal investment instrument, we see an increase in adoption from large institutions. This could be the main driver of Bitcoin prices in the long term," he said.

Although optimistic, he also reminded investors to remain cautious about market volatility.

"Bitcoin has strong fundamentals, but we still have to take into account external factors such as global economic policies and traditional market movements," he added.

"I believe that 2025 will be an important year for Bitcoin and the crypto ecosystem as a whole. With a clearer combination of regulations, institutional adoption, and market momentum, we can see Bitcoin reach a higher level. However, as usual, investors must continue to do in-depth research and understand the risks," concluded Oscar Darmawan.

INDODAX continues to be committed to providing the best education and trading services for crypto investors in Indonesia.