🌎 Cryptocurrencies Surge as Inflation Data Hints at Fed Rate Cuts

Annual consumer prices retreated in August, raising hopes that the Federal Reserve will start cutting interest rates in its September meeting.

Cryptocurrencies and U.S. stocks continued rising on Wednesday, Aug. 14 after the release of July’s inflation report. THORChain (RUNE) was the top gainer of the day as it jumped by 12%. It was followed by Toncoin (TON) at 11.31%, Notcoin (NOT) at 9.42%, and Celestia (TIA) at 8.97%, which all rose by over 10%.

Toncoin’s token climbed to $7.27, its highest point since July 20 and 51% above its lowest point this month. Similarly, Notcoin, the popular tap-to-earn token, rose to $0.0128, while Celestia increased to $6.60. Other major coins like Bitcoin (BTC), Ethereum (ETH), and Cardano (ADA) were also in the green.

US Inflation Slowed in July

According to the Bureau of Labor Statistics, the headline Consumer Price Index (CPI) slowed to 2.9%, while the core CPI dropped from 3.3% in June to 3.2% in July. However, both figures rose slightly by 0.2% on a month-on-month basis.

The U.S. CPI data came a day after the statistics agency published weaker-than-expected producer price index numbers, leading to a strong rebound in American equities. The Dow Jones and the Nasdaq 100 indices rose by over 400 points, while the U.S. dollar index slipped.

These numbers imply that the Federal Reserve will likely start cutting rates in its September meeting. In an interview, David Rubenstein, the billionaire founder of Carlyle, predicted that the Fed would cut by 0.25% instead of 0.50%, citing the U.S. election period.

Cryptocurrencies like Celestia, Notcoin, and Toncoin could receive a boost from rate cuts since they tend to push investors toward riskier assets. This dynamic helps explain why most coins rallied during the Covid pandemic.

Toncoin and Notcoin Rally

Toncoin and Notcoin also rallied after the TON Blockchain, backed by Telegram, launched a new $40 million fund to support networks in the ecosystem.

The developers hope these funds will attract new developers and those migrating from other blockchains like Ethereum and Solana. This ecosystem fund comes at a time when the Toncoin ecosystem is growing, supported by games and tap-to-earn platforms like Hamster Kombat and TapSwap.

TON Blockchain also has nearly $600 million locked in its DeFi ecosystem, with STON.fi, DeDust, and Tonstakers being the biggest players on the platform.

Ecosystem funds are common in the blockchain industry. In June, the Manta Foundation launched its $50 million fund. Other chains with similar funds include Base, Avalanche, and Sui.