The crypto market, starved of fresh economic data due to the prolonged U.S. government shutdown, will finally get a key data point with the release of September\u2019s Consumer Price Index (CPI) on Friday.<\/p>\n
The inflation figure could trigger larger price swings in ether ETH$3,966.91<\/a> than in bitcoin BTC$111,390.85<\/a>, a store-of-value asset. Overall, however, the expected market volatility is nothing out of the ordinary.<\/p>\n Inflation ticked higher in September<\/p>\n The consumer price index for September, due for release at 12:30 UTC, is expected to show the cost of living rose 3.1% from a year earlier, up from 2.9% in August and the highest in 18 months, according to a survey of economists by data provider FactSet. On a monthly basis, inflation likely rose 0.4%, matching August’s pace.<\/p>\n Core inflation, which excludes the volatile food and energy categories, is forecast to have increased by 3.1% for the third straight month, with a monthly gain of 0.3%.<\/p>\n The consensus is that the data, whether it beats or misses expectations, is unlikely to deter the Fed from cutting its benchmark interest rate by another quarter-point next week.<\/p>\n That said, a hotter-than-expected print could bode well for the dollar, according to analysts at ING. A strengthening dollar index may arrest gains in the crypto market.<\/p>\n “We don\u2019t think U.S. CPI will offer that opportunity as we expect a consensus 0.3% MoM core print. But surely with 50bp of easing fully priced in by year-end, any hot print could offer good support to the dollar,” ING analysts said in a note Thursday.<\/p>\n Meanwhile, a lower CPI could trigger a risk-on reaction in markets, according to digital asset trading firm Zerocap.<\/p>\n “The\u00a0U.S.\u00a0government shutdown has starved keen market analysts of often crucial data, and a drip feed of macro signals in the wake of the crypto pullback two weeks ago means a lower CPI reading could easily stoke bullish sentiment amid an ongoing retail selloff,” John Toro, head of trading at Zerocap, said in an email.<\/p>\n Ether to swing 2.9%<\/p>\n According to data from the Deribit-listed options market, ether, the second-largest token by market value, could move by 2.9% following the CPI release, outpacing bitcoin’s volatility.<\/p>\n