Leading cryptocurrency Bitcoin (BTC) rose over 7.5% to $66,250, recording its highest single-day gain in nearly two months. Behind this rise lies the weak economic data of the USA. According to data published by the Ministry of Labor, the consumer price index (CPI) increased below expectations in April. This situation suggested that inflation in the world’s largest economy may be on a downward trend. Additionally, the halt in the increase in retail sales also attracted the attention of investors.

Weak economic data increased the possibility of the US Federal Reserve (FED) cutting interest rates. Investors shape their interest rate cut expectations by closely following FED funds futures. These transactions reflect investors’ predictions about future interest rate cuts by the FED. Currently, market expectations are that the FED will make its first interest rate cut in September. This development is seen as an important support element for investment instruments, which are called risky assets and are positively affected by interest rate cuts.

Central banks of other developed countries, as well as the USA, may take a similar approach. The Bank of England (BOE) and the European Central Bank (ECB) are also expected to cut interest rates in June. The Swiss National Bank (SNB) and the Swedish Central Bank (Riksbank) had previously cut interest rates. This indicates that global central banks are starting to prioritize supporting economies rather than fighting inflation.

The chart from data tracking website MacroMicro shows that central banks are moving towards monetary expansion policy. This policy aims to reduce interest rates and stimulate economic activity by injecting more liquidity into the market. Monetary expansion traditionally contributes positively to the appreciation of risky assets.

Brokerage firm Pepperstone states that the interest rate reduction and monetary expansion policies expected in the summer will support the appreciation of risky assets, especially stocks. This may lead investors to turn to investment instruments with higher return potential. Bitcoin can also benefit from this trend as an asset with high return potential.

Uncertainties in the global economy and ongoing geopolitical risks may affect the price movements of Bitcoin and other risky assets. Additionally, policy changes by the FED and other central banks may not occur as investors expect. Therefore, it is important for investors to closely monitor market conditions and always remain cautious.

As a result, weak US economic data and summer interest rate cut expectations paved the way for the rise of Bitcoin and other risky assets. Central banks’ turn to monetary expansion policy is considered as a factor supporting this upward trend. However, investors should be cautious about changes in market conditions and should always make investment decisions after conducting thorough research.