Consumer prices rose as expected in December, a potentially positive sign for risk assets battered by this month’s shifting outlook on Federal Reserve rate cuts.

The Consumer Price Index (CPI), which tracks price changes across a broad range of goods and services, rose 2.9% in the 12 months through December, the Bureau of Labor Statistics said Wednesday.

“Markets had been losing some faith on the disinflation thesis and the idea of Fed rate cuts,” Grayscale’s Head of Research Zach Pandl told Decrypt. “I think this report puts Fed rate cuts back on the table.”

Wednesday’s inflation print was highly anticipated, following data that suggested the U.S. economy was humming along at a stronger-than-expected pace last week. Bitcoin’s price started at $102,000—only to dip below $93,000 after Friday’s blowout jobs reading.

The Bitcoin price immediately jumped following Wednesday’s inflation snapshot, increasing 1.9% and briefly surpassing $99,000 in around 30 minutes. Meanwhile, the price of Ethereum and Solana were also bolstered by the fresh inflation figures, rising to $3,300 and $192, respectively.

Bitcoin has held onto a significant chunk of its post-election gains, but inflation fears have eaten away at them since the cryptocurrency’s price peaked at $108,000 last month.

On a month-to-month basis, consumer prices rose 0.4% in December, slightly outpacing inflation from the previous month. Prior to that, monthly inflation clocked in at 0.2% from July through October.

Inflation has come down significantly in the U.S. from a four-decade high of 9.1% in 2022, but it still remains above the Fed’s 2% target. Despite easing financial conditions last year, Fed policymakers have signaled their quest to tame rising prices may not be over yet.

Policymakers believe that potential shifts in immigration and trade policy under President-elect Donald Trump could present upside risks to inflation, Fed minutes released last week showed. Taking that into consideration, the Fed indicated last month that it would likely cut rates by 25 basis points just two times this year, down from its previous projection of four rate cuts.

Given the U.S. economy’s recent strength, some analysts believe that the Fed’s easing campaign could already be over. Traders penciled in a 53% chance Wednesday that the Fed cuts rates once in 2025, or not even at all, according to CME FedWatch. That was notably down from 70% Tuesday.

Pandl said that Wednesday’s report brought about the lowest core CPI reading since July at 3.2%, coming in below economists’ expectations of 3.3%. Economists view core inflation, which strips out volatile food and energy prices, as a better gauge for underlying trends.

“Before this report, the market was only pricing in one rate cut this year,” he said. “The idea that we could have Fed rate hikes this year is not in sight after this report.”

Lower interest rates tend to be supportive of risk assets like stock and crypto. They can contribute to inflation through lower borrowing costs and increased spending.

Core PCE, the Fed’s preferred inflation gauge, will be released after the U.S. central bank’s meeting later this month. Amid signs of the economy’s strength, traders are all but certain that the central bank will hold rates steady.

Edited by Stacy Elliott.

Bitcoin (BTC) adoption by U.S.-listed public companies continues in full steam.

The latest purchase comes from NYSE-listed Genius Group (GNS). On Jan. 10, GNS reported increasing its bitcoin holding to $35 million, which was ahead of its scheduled target of $120 million. In the process, it acquired 372 BTC at an average price of $94,047 per bitcoin. The first announcement came on Nov. 12, when it announced its “Bitcoin-first” strategy.

On Tuesday, GNS also reported a rights offering, allowing shareholders to purchase additional shares at discounted prices. If fully subscribed, the rights offering could generate $33 million. GNS founder and CEO Roger Hamilton intends to buy join in the rights offering and buy 500,000 shares.

The firm is also pursuing loan finances to accumulate bitcoin. Shares of GNS closed 7% higher on Tuesday.

Apart from GNS, Nasdaq-listed Ming Shing Group (MSW), a wet trades works service provider, also purchased 500 BTC at an average price of $94,375 per bitcoin. MSW shares were up 43% higher year-to-date.

The new wave of bitcoin treasury adoption surges ahead with four publicly traded companies announcing bitcoin buys and seven companies announcing a strategy, but no acquisition.

Disclaimer: This article, or parts of it, was generated with assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards. For more information, see CoinDesk’s full AI Policy.

Artificial intelligence cryptocurrencies are still making sizable gains—just as asset manager Franklin Templeton highlights how big AI and crypto could be together.

Franklin Templeton said in a Tuesday note that how AI agents interact on blockchains is “very exciting.” And it noted the current buzz surrounding AI16z and the Virtuals Protocol—two tokens that have made some of the biggest gains over the past 24 hours among the top 100 coins ranked by market cap.

AI16z is an investment DAO run by AI agents. CoinGecko data shows that over the past day, its native token has risen by over 18%—after slowing down last week—and is now trading hands for $1.30. It briefly fell out of the top 100 on Monday, but has recovered and bounced back into such valuable company.

The world’s biggest crypto exchange, Binance, announced earlier this month that it would launch perpetual futures contracts trading for AI16z. Even with today’s surge, however, AI16z is down 32% over the last week, and is 47% off its all-time high price of $2.47 set less than two weeks ago.

And Virtuals Protocol’s VIRTUAL—a token launched on Ethereum layer-2 network Base last year—is up by 15% over the past day. It’s now priced at $2.98. Virtuals is used to launch a variety of AI agents, including AiXBT—a token that nearly matched its own all-time high price on Tuesday.

Both tokens had slowed their rallies down in recent days after a white-hot start to the year, but are making a comeback as the broader crypto market recovers Tuesday.

AI agent software programs are designed to help humans by completing tasks on their own. As the hype around AI has grown, many in the field have made big promises on how much such agents will help humans complete tasks. And some of these agents have their own tokens, adding potential utility and speculation into the equation.

Franklin Templeton added that even if AI agents have some way to go to be as refined and useful as envision, the sector holds substantial promise.

“Although these agents are not yet fully autonomous, and have little utility in their current state, this emerging sector may hold significant promise and is worth watching closely as it evolves and matures,” the note said. 

Edited by Andrew Hayward