The US Consumer Price Index rose to 3.8% annually in April 2024 — the highest in a year — driven by an energy price shock tied to the US-Iran conflict. Bitcoin slid about 1% to around $80,500 before stabilizing near $81,000, while spot Bitcoin ETFs saw a combined daily outflow of over $233 million on May 12. The data, released this morning, confirmed that the inflation overshoot was not a fluke: monthly inflation hit 0.6%, matching economist predictions but topping the initial 3.7% market forecast.
What drove the numbers
Before US military strikes on Iran in late February, the annual inflation rate stood at 2.4%. The conflict pushed energy prices higher, and April's report bore the full brunt. The 10-year US Treasury yield climbed more than 4 basis points to 4.459% as markets priced in a slower pace of rate cuts. Bitcoin's 24-hour price change remained nearly flat at 0.1%, suggesting the dip was a quick reflex rather than a rout.
ETF outflows and market structure
The $233 million outflow from US spot Bitcoin ETFs on May 12 marked a sharp reversal after weeks of steady inflows. The selling concentrated in funds from BlackRock and Fidelity, though Bitcoin's market dominance held steady. That suggests the move was a risk-off rotation, not a structural shift away from crypto — at least for now.
Kiyosaki’s inflation warning
Author Robert Kiyosaki weighed in, urging investors to buy Bitcoin, gold, silver, and Ethereum as hedges. He warned that the Iran war would keep oil prices rising, adding to US inflation. Kiyosaki also pointed to the country's roughly $34 trillion debt, arguing it forces the government to keep printing money. His call echoes a sentiment that has gained traction as inflation proves stickier than many expected.
The next CPI reading is due in June. If energy costs don't ease, the Fed's path on rates — and Bitcoin's trajectory — could get a lot more interesting.
