cryptonews

Floki, Wormhole, Pepe pumps as US PCE inflation nears 2%

Floki, Wormhole, Pepe pumps as US PCE inflation nears 2%

Cryptocurrencies, stocks, and other risky assets received another catalyst on Friday, Sept. 27, after the U.S. government published encouraging inflation data.

US PCE inflation dropped in August

Bitcoin (BTC) held steady above $65,000 while altcoins like Wormhole (W), Floki (FLOKI), Pepe (PEPE), and Shiba Inu (SHIB) jumped by over 15%. Futures tied to the Dow Jones, S&P 500, and Nasdaq 100 rose by over 25 basis points.

Data from the statistics agency showed that personal consumption expenditure dropped from 0.2% in July to 0.1% in August, lower than the expected 0.2%. Year-over-year, it fell from 2.5% to 2.2%, marking the lowest point in over two years.

Core PCE, which excludes volatile food and energy prices, also fell from 0.2% to 0.1% during the month.

These numbers suggest that the Federal Reserve is nearing its inflation target of 2.0%. As a result, the bank will likely continue cutting interest rates in the final two meetings of the year, as the unemployment rate remains above 4%. The Fed had already slashed rates by 0.50% in its last meeting.

Other global central banks, including the Swiss National Bank, European Central Bank, and the Bank of England, have also adopted a dovish tone.

Historically, cryptocurrencies like Bitcoin, Ethereum, and Shiba Inu have performed well when the Fed is cutting interest rates.

In addition, China, the world’s second-largest economy, has opened the floodgates of money. On Tuesday, the central bank reduced a key interest rate and lowered reserve ratios, a move that will unlock over $100 billion to stabilize the stock market. Beijing is also considering delivering over $150 billion in additional stimulus.

Changpeng Zhao release

Bitcoin, Wormhole, and Pepe also rose as crypto investors awaited Changpeng Zhao’s release from custody.

Zhao, Binance’s founder, had been serving a four-month prison sentence as part of his settlement with the U.S. government.

In addition to his sentence, Zhao was fined $50 million and relinquished his role as Binance’s CEO. Binance was ordered to pay $4.3 billion in penalties.

Analysts believe that CZ’s release will lead to more crypto upside. In an X post, Ki Young Ju, the CEO of CryptoQuant predicted that crypto would “skyrocket” when he is released. Another analyst, Adrian Zdunczyk, who has over 600k followers on X predicted that traders will start pumping cryptocurrencies after his release.

Zhao’s release came at a time when sentiment in the crypto market had improved, with Bitcoin entering a technical bull market.



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