Bitcoin jumps 4% as PPI data fuels inflation optimism, but experts urge caution

The Producer Price Index report released Friday showed another sign of easing inflation in the first quarter of 2025, aligning with the soft Consumer Price Index reading reported April 10.

Data from the Bureau of Labor Statistics showed that the PPI for March fell 0.4% month-over-month, while core PPI dropped 0.1%, significantly undercutting forecasts for increases of 0.2% and 0.3%, respectively. On an annual basis, PPI rose 2.7% and core PPI increased 3.3%, both below projections of 3.3% and 3.6%. The results contributed to broad declines in both CPI and PPI inflation measures last month.

Bitcoin gained momentum following the latest U.S. macroeconomic data, with prices rising 4% to $82,500, according to The Block’s price page . The GMCI 30 Index , which tracks the 30 largest digital assets by market capitalization, showed a broad cryptocurrency market recovery. Ether, solana and cardano led gains among major altcoins, each rising more than 4% on the day.

Cautious optimism

Slowing inflation would typically raise hopes for Federal Reserve rate cuts. However, analysts caution that the data reflects past conditions, and say market dynamics have shifted since the first quarter due to fresh tariff turbulence.

"Softer inflation gives the bulls a green light for now, but sustaining this move will require a stable policy backdrop and no inflation shocks from tariffs or geopolitics," Dr Kirill Kretov, senior automation expert at CoinPanel, told The Block. "Crypto loves easing conditions, but it’s a headline-sensitive environment, and the outlook remains fragile."

Bond market volatility has also become a growing concern. Bond prices fell alongside equities this week as the benchmark 10-year and 30-year U.S. Treasury yields both climbed to 4.5%, spooking markets .

"More important than bailing out the US equity markets has been the suggestion of JP Morgan’s Jamie Dimon (and undoubtedly many others) to ensure the US Treasury market does not meltdown further," said Darren Chu, an analyst at BRN Consulting. Chu added that "recent bond auctions have been lacklustre in some cases with talks of a potential bailout of some of the largest hedge funds that have been hit hard on some of their US Treasury trades."

Meanwhile, tensions between the United States and China continued to escalate , with both sides doubling tariffs by Friday and raising fears of further retaliation or a prolonged standoff.

CoinPanel's Kretov said the situation adds complexity to the Fed’s decision-making.

“We are in a politically charged period with frequent headlines that can shift sentiment fast, and markets are highly reactive to any narrative that might threaten the soft-landing scenario,” he said. “Tariff escalation would complicate the Fed’s path, potentially delaying cuts.”

Amid ongoing uncertainty, investors are looking ahead to the release of the Personal Consumption Expenditures Price Index — the Fed’s preferred inflation gauge — scheduled for April 30, which could offer further clues about potential policy moves, according to Kretov.