Recaps · US CPI · 11 Jan 2024, 13:30 UK
The ETF day, not the CPI day
On most CPI days the inflation report is the main event. On 11 January 2024 it was not. The first US spot Bitcoin ETFs began trading that morning, a day after the SEC approved them. Bitcoin's path that afternoon followed the ETF opening, not the inflation data.
- Release
- Thursday 11 January 2024, 13:30 UK
- Headline CPI
- +0.3% m/m, 3.4% y/y (November: 3.1%)
- Core CPI
- +0.3% m/m, 3.9% y/y
- Same day
- Eleven spot Bitcoin ETFs start trading (Reuters)
- Bitcoin at release
- $47,201
The report
Annual inflation rose from 3.1% to 3.4% in December, and core inflation eased only slightly, to 3.9%. Livemint reported that the CPI rose more than expected. US stocks opened mixed.
The ETF opening
- 1 14:30 UK: US market open, ETFs start regular trading
- 2 14:50 UK: high, about +3.9%
- 3 17:25 UK: low, about 3.4% down
Bitcoin barely moved on the CPI release: -0.24% after five minutes. The move began just before the US stock market opened at 14:30 UK. It reached about 3.9% up at 14:50 UK, around $49,000. Bloomberg put the high at $49,021, the first time above $49,000 since December 2021. Then it fell steadily, to about 3.4% below the release price at 17:25 UK. The first hour, +1.49%, ranks #29 of 117 CPI releases at 2.8 times a normal hour.
Reuters reported $4.6 billion of ETF shares changed hands on the first day. CoinDesk noted that about half was Grayscale's GBTC, where existing holders could now sell.
| Market | 5m | 1h | 4h | 24h | 1w | × normal hour |
|---|---|---|---|---|---|---|
| Bitcoin | −0.24% | +1.49% | −2.97% | −3.08% | −10.25% | 2.8× |
| Ethereum | −0.08% | −0.48% | −2.41% | +0.98% | −5.26% | 0.7× |
| Solana | −0.67% | +0.09% | −6.14% | −6.82% | −7.36% | 0.1× |
| Cardano | −0.95% | −1.58% | −4.99% | −3.92% | −15.33% | 2.4× |
Change from the 13:30 UK release.
A classic "sell the news" day
The ETF approval had been expected for weeks, and Bitcoin had risen in anticipation. Once trading began, the price peaked within twenty minutes and then fell. Bitcoin was -3.1% a day later and -10.3% after a week. Ether fell less, -5.3% over the week, and Solana was down -6.1% at four hours.
For anyone studying CPI reactions, this day is a reminder to check the calendar for other events. A hot inflation number with a 3.9% rally and then a 3.4% fall would look like a strange reaction to the data. With the ETF opening in view, the data was a minor factor. The next month's hot January CPI gives a cleaner view of how Bitcoin treated an inflation surprise at the time.
Sources: release time and figures from the U.S. Bureau of Labor Statistics (public domain), first-print values via ALFRED, Federal Reserve Bank of St. Louis. Crypto: Bitstamp 5-minute candles; SPY/QQQ: IEX. No consensus forecasts are shown because they are proprietary; comparisons are with the previous release. “× normal hour” compares the first-hour move with the median move in matched quiet hours. How we measure it.