Insight #30

Rising Inflation in the U.S. and China, Along with Institutional and Technological Initiatives, Support Bitcoin. A Report on the BTC Market Outlook for Q1/2025.

Macroeconomics

1. Inflationary Trends and Producer Prices

Priority: High

These figures reflect fundamental shifts in the global economy, potentially fueling demand for Bitcoin as an alternative asset to hedge against inflation risks and volatility in traditional financial systems.

China – Consumer Prices (CPI):

- Annual inflation rose to 0.5% in January 2025 (up from 0.1% in December), exceeding market forecasts of 0.4%.

- Food prices increased (0.4% vs. -0.5% in December) due to higher pork and fresh vegetable costs, while core CPI (excluding food and energy) climbed to 0.6%—its highest level in seven months.

China – Producer Prices (PPI):

- A 2.3% year-over-year decline matched the previous month and surpassed expectations of a 2.1% drop.

- Continued deflation for 28 consecutive months signals subdued demand, despite government measures aimed at stimulating the economy.

Relevance to Bitcoin:

- Amid macroeconomic uncertainty and unexpected inflation spikes, investors may in…