Crypto market adds over $50 billion in 1 hour as CPI data comes in lower than expected

After the Consumer Price Index (CPI) or inflation figures for July came in more favorable than expected, the cryptocurrency market quickly responded by adding more than $50 billion to its market capitalization in just one hour.

Following the news on inflation slowing down, both the stock and cryptocurrency market immediately went up. Specifically, the S&P 500 index rose close to 1.8% in early trading, while the total crypto market cap climbed from $1.092 trillion up to $1.142 trillion in an hour, as per CoinMarketCap data.

Total cryptocurrency market cap over 24 hours. Source: CoinMarketCap

Before the latest CPI report came out, the crypto market was in the state of ‘FUD’ (fear, uncertainty, doubt) as the majority of its participants feared it would be unfavorable.

Inflation data deflates ‘FUD’

According to crypto trading expert Michaël van de Poppe, these fears had contributed to Bitcoin (BTC)’s price correction and were, in his opinion, unwarranted.

That said, the fears had the foundation in the CPI report’s inflation figures for June, which were the highest since November 1981 and exacerbated the already downward trend in Bitcoin and the general crypto market.

At the time, Bitcoin wiped $15 billion from its market cap in only ten minutes, dropping from $379.91 billion to $364.55 billion upon the news.

Meanwhile, the new inflation data has sent the crypto market upwards, led by the prices of its major assets – Bitcoin and Ethereum (ETH). As it happens, Bitcoin has increased by 4.07% and now trades at $24,015, whereas ETH soared by 9.57% to $1,845.

Bitcoin 1-day chart. Source: CoinMarketCap

Indeed, the newest CPI data by the United States Bureau of Labor Statistics (BLS) has shown a bigger slowdown than previously expected (and feared), with prices increasing 8.5% year-over-year in July, according to the New York Times report on August 10.

CPI data over time. Source: The New York Times

As it happens, dropping gas costs in July have lowered the recent figures compared to those for June, which amounted to 9.1%, although prices for food and rent have continued in an upward direction.

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