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Bitcoin rises to highest level in more than a month after lighter-than-expected inflation

Cryptocurrencies have been under immense pressure after the collapse of a so-called stablecoin called terraUSD.

Umit Turhan Coskun | Nurphoto via Getty Images

The price of bitcoin jumped Tuesday following the release of a highly anticipated consumer price index report.

Bitcoin was last higher by 5% at more than $17,900, according to Coin Metrics. At one point, it climbed as high as $17,957.35, its highest level in more than a month. Ether rose 6.5% to $1,339.

The November U.S. consumer price index, which measures a wide basket of goods and services, showed an increase of just 0.1% from the month before it, the U.S. government said Tuesday.

Economists surveyed by Dow Jones had been expecting a 0.3% monthly increase. This fueled investor hopes that the Federal Reserve will slow the pace of its interest rate hikes.

From the same time in the previous year, the index gained 7.1%, compared to expectations of 7.3%.

The lighter-than-expected report sent the 10-year Treasury yield lower. Rising yields make future profits, like those promised by higher-risk, growth-oriented companies, less attractive.

The post-CPI jump follows another spike from earlier in the morning, which suggests buy pressure has been building, according to Noelle Acheson, an economist at newsletter Crypto is Macro Now and former head of market insights at Genesis.

“It feels like more are starting to accept that the bottom may be in, and these are potential accumulation levels,” she told CNBC.

“The uncertainty around further contagion is still the main overhang and any bad news there could send prices much lower, but smart investors are weighing probabilities here,” she added.

The move comes as investors continue to monitor and assess the fallout of the once popular exchange FTX, whose leader Sam Bankman-Fried was charged Tuesday by the Securities and Exchange Comission for defrauding investors. Concerns about customers withdrawals from Binance, the industry’s largest exchange, are also mounting.

Bitcoin’s price has been relatively stable over the past month — since the big tumble that followed November’s FTX blowup — as the macro environment continues to drive the crypto asset to some extent, even as the FTX scandal shook investors’ confidence.

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