U.S. CPI Increases 0.3% in December; Bitcoin Remains Steady at $92K Amid Rate Hold Expectations

Summary:
In December, U.S. inflation saw a slight upward movement as the Consumer Price Index for All Urban Consumers (CPI-U) increased by 0.3% month-over-month and 2.7% year-over-year. The primary driver of this increase was a 0.4% rise in shelter costs. Meanwhile, Bitcoin was trading around $92,176.63, witnessing a 1.62% gain over the previous 24 hours. Market expectations suggest a stable interest rate outlook as inflation remains controlled.

Key Takeaways:

In December, U.S. inflation rose by 0.3% m/m and 2.7% y/y.
Shelter costs were the most significant contributor to the monthly inflation increase.
Bitcoin is currently valued at approximately $92,176.63, reflecting a 1.62% daily gain.
Core inflation remains stable at 0.2% m/m and 2.6% y/y, supporting rate hold expectations.
Market conditions suggest that Bitcoin may perform well amidst stable interest rates and controlled inflation.

Market Reaction and Interest Rate Outlook

Core inflation data revealed stability, with the Bureau of Labor Statistics (BLS) reporting a 0.2% month-over-month increase in CPI excluding food and energy (CPI ex-food & energy) and a 2.6% annual increase. This aligns with the market's expectations for the Federal Reserve to maintain interest rates during their upcoming meeting on January 29, 2026.

According to the BLS, “The index for shelter rose 0.4 percent in December and was the largest factor in the overall monthly increase.”

Rate pricing continues to play a crucial role in influencing cryptocurrency performance. Data from public snapshots derived from CME FedWatch showed a leaning towards a rate hold for January, with expectations of “no change” probabilities hovering in the high 70% range, as noted by KuCoin.

Volatility markets reflect a similar macroeconomic sentiment. Deribit’s documentation defines DVOL as the options-implied volatility benchmark that settles via a 60-minute time-weighted average price (TWAP).

Implications for Cryptocurrency Markets

The CPI increase driven by shelter costs keeps the term premium relatively stable. However, with core inflation registering at 0.2%, the “higher-for-longer” concern that usually negatively impacts Bitcoin duration trades is minimized.

A CPI of 0.3%, combined with a core inflation rate of 0.2%, supports stability at the front end of the market. This suggests that systematic funds, which react to macroeconomic surprises, are not receiving new signals. At the same time, discretionary trading desks are likely to continue viewing Bitcoin as a proxy for rates volatility. The subdued implied volatility linked to DVOL products reduces the carry cost for buying convexity in anticipation of the upcoming meetings on January 29 and the CPI report slated for February 11, 2026, as scheduled by the BLS.