Inflation Expectations Fall, Cryptocurrencies Rise

US inflation expectations are plummeting, pushing crypto market capitalization to June highs and fueling hopes of Fed rate cuts. Is this the start of a new bullish era?

The cryptocurrency market is experiencing a significant rally after news broke that Consumer Inflation Expectations in the United States fell to a promising 3.2%, down from 3.6%. This is the first decline in the figure since the recent surge recorded at the end of October last year, marking a turning point that is instilling optimism in risk assets.

The CMC100 index, which measures the performance of the top 100 cryptocurrency projects by market capitalization (excluding stablecoins and pegged tokens), reflected this widespread optimism / CoinMarketCap

Inflation Slowdown: A Tailwind for Cryptocurrencies

The decline in Consumer Inflation Expectations in the United States is a crucial signal for the markets. In the context of the tariff war between China and the United States, where trade restrictions can raise import costs and, consequently, inflation, a moderation in these expectations suggests that the US economy may be better able to weather the inflationary effects of such tensions. For the Federal Reserve (Fed), more subdued inflation provides greater room for maneuver to consider looser monetary policies, such as lowering interest rates.

Booming Capitalization: Risk-on Bets Drive the Market

At the time of this report, the market capitalization of cryptocurrencies increased 2.11%, reflecting renewed demand for risky assets. Investor speculation is soaring with the decline in Consumer Inflation Expectations. If the Fed finds relief and a solid case for cutting interest rates, this would imply lower borrowing costs for businesses and consumers, boosting investment and economic growth. In this scenario, cryptocurrencies strengthen considerably, as investors seek higher returns in a low-interest rate environment, while the US dollar tends to weaken, making assets denominated in other currencies or of a decentralized nature, such as cryptocurrencies, more attractive.

According to data from CRYPTOCAP, the global cryptocurrency market capitalization reached an impressive $3.33 trillion, marking new highs for the month of June and consolidating risk appetite.

The Crypto Rally in Detail: CMC100 Performance and Gainers of the Day

The CMC100 index, which measures the performance of the top 100 cryptocurrency projects by market capitalization (excluding stablecoins and pegged tokens), reflected this widespread optimism, rising to $207.90 with gains of 1.74% over the past 24 hours.

The cryptocurrencies leading the day's gains, highlighting the market's euphoria, include:

KAIA: +21.35%
SPX: +37.27%
FARTCOIN: +10.42%
TAO: +8.20%
HYPE: +5.48%
WAL: +4.51%

The major cryptocurrencies also showed robust performance, with Bitcoin rising +1.88% and Ethereum +1.75%, consolidating market leadership.

The retreat in US inflation expectations injects fresh bullish momentum into the cryptocurrency market, positioning digital assets as clear beneficiaries of a potential easing of the Fed's monetary policy. While market capitalization reaches new monthly records, inherent volatility and macroeconomic factors will continue to dictate the tone of this exciting rally. Investors will keep an eye on the Fed's next moves and the evolution of trade tensions.

Disclaimer: The information contained in this news item is for informational purposes only and does not constitute financial advice. Investing in cryptocurrencies involves significant risks and may result in the loss of all or part of your invested capital. Always conduct your own research and consult a financial professional before making investment decisions.