Americas Crypto Daybook: Upcoming Inflation Data May Influence Bitcoin's Price Trend as Demand Continues to Rise

By Francisco Rodrigues (all times are in Eastern Time unless otherwise specified) Today's U.S. inflation report may potentially break the stagnant trend that has been affecting bitcoin, currently valued at $87,212.34, this week. Historically, January's inflation data has shown substantial price increases. For instance, last year's data marked the end of a series of declining readings, a pattern also observed in 2023. This is largely because businesses often reassess and adjust their prices at the beginning of the year, as noted by the Wall Street Journal. If the inflation report exceeds expectations, it may indicate that 'monetary policy has more work to do,' according to Dallas Fed President Lorie Logan, who spoke last week. The Federal Reserve has already indicated that it is not planning to make any immediate adjustments to interest rates following the 100 basis points of reductions implemented last year. Additionally, the Trump administration's tariffs are a factor to consider, with the Federal Reserve Bank of Boston suggesting a potential increase of up to 0.8% in core PCE, the inflation measure focused on by the Fed. However, in 2018 and 2019, tariffs had a negligible impact. On the other hand, a softer-than-expected inflation report could have a positive effect on risk assets, including bitcoin. A lower-than-expected figure would likely increase expectations of interest rate cuts, potentially weakening the U.S. dollar index and lowering Treasury yields, as reported by CoinDesk's Omkar Godbole. Meanwhile, demand for the largest cryptocurrency remains strong. This week, Japanese mobile game studio Gumi announced plans to accumulate approximately $6.6 million worth of BTC, while KULR Technology Group increased its cryptocurrency holdings to 610.3 bitcoin. Similarly, Goldman Sachs' 13F filing reveals that the banking giant significantly increased its exposure to spot bitcoin and ether ETFs in the fourth quarter. Strategy's near-weekly bitcoin purchases also continue. The Coinbase premium for bitcoin, which measures the difference between BTC's price on the U.S. exchange and Binance, recently turned negative, suggesting that U.S. traders are cautious about the upcoming inflation report. This caution comes amid growing challenges for the crypto market, which may have reached its peak. Research firm BCA Research recently shared a note with clients suggesting that record ETF inflows and the memecoin craze are warning signs. Warning signs are also present elsewhere, with a recent JPMorgan report highlighting that crypto ecosystem growth slowed last month, while total trading volumes dropped 24%. However, activity remains ahead of where it was before the U.S. elections. Remain vigilant. Key Events to Watch Upcoming Token Events Conferences: CoinDesk's Consensus is scheduled to take place in Hong Kong on February 18-20 and in Toronto on May 14-16. Use the code DAYBOOK to receive a 15% discount on passes. Token Talk By Shaurya Malwa Derivatives Positioning Market Trends: Bitcoin Statistics: Technical Analysis Crypto Equities ETF Flows Spot BTC ETFs: Spot ETH ETFs Source: Farside Investors Overnight Flows Chart of the Day While You Were Sleeping In the Ether UPDATE (February 12, 12:03 UTC): Adds Derivatives Positioning section.