Bitcoin Surges Above $97,000 Amid Light Inflation Data

On Tuesday, Bitcoin made a remarkable comeback, rising alongside other risk assets as traders reacted to a milder inflation report.

The price of the leading cryptocurrency increased by 4.5%, reaching $97,044.35, as reported by Coin Metrics. This followed a dip below the $90,000 support level earlier in the week. The overall cryptocurrency market also saw positive movement, reflected in a 3.9% gain in the CoinDesk 20 index.

Significant Gains for Associated Stocks

Companies closely linked to the cryptocurrency sector also benefited from this boost. Shares of Coinbase and MicroStrategy rose by over 3% and 5%, respectively. Mining companies like Mara Holdings and Core Scientific recorded similar increases of around 5%.

Impact of Economic Data

This sudden price increase coincided with the U.S. Bureau of Labor Statistics releasing data indicating that inflation was less severe than expected. The producer price index, which tracks wholesale inflation, rose by only 0.2% in December. This figure was notably lower than the 0.4% increase anticipated by economists surveyed by Dow Jones.

Currently, the cryptocurrency market finds itself navigating between investor apprehensions regarding escalating inflation and the optimistic outlook regarding the incoming administration under Donald Trump. This political transition could potentially provide substantial support for the crypto industry throughout the year. Consequently, many traders are preparing for a potentially volatile January that may extend well into the next quarter.

Previous Volatility and Future Expectations

Last week, Bitcoin experienced a notable decline following unexpectedly positive payroll numbers, which led to a spike in bond yields. This prompted many investors to divest from growth-focused risk assets. Additionally, news surrounding Trump's tariff proposals contributed to a more anxious atmosphere for investors and bolstered the dollar, which typically moves inversely to Bitcoin.

According to Fundstrat's Tom Lee, during a Monday appearance on CNBC's "Squawk Box," it is possible that Bitcoin could experience further correction down to $70,000 before it climbs to new heights. He expressed a bullish long-term view, projecting that Bitcoin might end the year valued between $200,000 and $250,000. Crypto investors are well aware that significant pullbacks can often occur during bull runs.

Currently, Bitcoin sits 10% below its all-time high reached on December 17, yet it has gained 3% since the start of 2025.

Bitcoin, inflation, stocks