Cryptocurrencies Surge as U.S. Inflation Data Spurs Rate Cut Speculation

Annual consumer prices in the U.S. eased in July, fueling optimism that the Federal Reserve may initiate interest rate cuts at its upcoming September meeting. This economic backdrop provided a bullish momentum for both cryptocurrencies and U.S. equities, with THORChain (RUNE) leading the charge, gaining 12% on August 14. Toncoin (TON), Notcoin (NOT), and Celestia (TIA) also posted significant gains, with each token rising over 10% during the day.

Toncoin reached $7.27, its highest level since July 20, marking a 51% increase from its lowest point earlier in the month. Notcoin, a popular tap-to-earn token, climbed to $0.0128, while Celestia surged to $6.60. Major cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), and Cardano (ADA) also saw positive movements, reflecting the market’s overall optimism.

According to the Bureau of Labor Statistics, the headline Consumer Price Index (CPI) decelerated to 2.9% in July, while the core CPI fell slightly to 3.2% from 3.3% in June. However, both indices rose by 0.2% on a month-over-month basis. This slowdown in inflation followed weaker-than-expected producer price index data, which had already spurred a strong rebound in U.S. stocks, with the Dow Jones and Nasdaq 100 indices each gaining over 400 points, and the U.S. dollar index declining.

The latest inflation figures have strengthened the case for the Federal Reserve to consider cutting interest rates at its next meeting. In an interview with Bloomberg, David Rubenstein, the billionaire founder of Carlyle, suggested that the Fed might opt for a modest 0.25% cut, particularly given the proximity of the U.S. election period.

A potential rate cut could be beneficial for cryptocurrencies like Celestia, Notcoin, and Toncoin, as lower rates typically drive investors toward riskier assets. This is a pattern observed during the Covid pandemic, where digital assets saw substantial inflows.

Toncoin and Notcoin also benefited from the launch of a new $40 million venture fund by the TON Blockchain, a network supported by Telegram. The fund aims to bolster the Toncoin ecosystem by attracting new developers, including those transitioning from blockchains like Ethereum and Solana. The TON Blockchain currently has nearly $600 million locked in its DeFi ecosystem, with key projects like STON.fi, DeDust, and Tonstakers leading the platform’s growth.

Meanwhile, Celestia’s rally appears to have been driven largely by investors taking advantage of a dip in its price, with no specific news reported about the network.

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