Bitcoin breaks $26K as US inflation drops to 6% in February

February inflation in the US fell to 0.4% from 0.5% in January, in line with economists’ estimates, the Bureau of Labor Statistics (BLS) said on Tuesday.

On a year-on-year basis, inflation eased to 6.4% from 6.0% in the previous month, according to estimates.

The core rate of inflation – which strips out food and energy costs – rose 0.5% in February and 0.4% in January, against forecasts of 0.4%. The year-on-year key rate was 5.5%, as expected, compared with 5.6% in January.

The price of Bitcoin (BTC) hit a nine-month high of $25,484 in the minutes following the report. The world’s largest cryptocurrency reached $26,373 in the last 24 hours, representing an 18% gain.

Inflation worries have taken a backseat in recent days as investors, the government and the Federal Reserve grapple with the potential systemic impact of multiple bank failures.

A week ago, traders were betting the central bank would raise the benchmark Fed funds rate by 50 basis points at its March meeting. Following the decline of Silicon Valley Bank on Friday and the closing of Signature Bank over the weekend, traders quickly turned heads and are now pricing in a very low chance of any rate hike in March and a mid-summer rate cut.

Update (March 14, 12:55 UTC): Chart adds 24-hour Bitcoin performance.

Update (March 14, 13:16 UTC): Bitcoin’s price performance improves.

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