The performance of CPI data will affect interest rate cut decisions, and the success of rate cuts usually has the following positive effects on the crypto world:

• Capital inflows drive price increases: A decrease in CPI often signals a slowdown in economic growth and reduced inflationary pressures, which may prompt central banks to implement interest rate cuts to stimulate the economy. Lowering interest rates increases market liquidity and reduces capital costs, leading investors to possibly shift some funds from traditional financial assets to the crypto world in pursuit of higher returns, thereby driving up cryptocurrency prices. For example, after the initiation of the last Federal Reserve rate cut cycle, cryptocurrencies like Bitcoin typically saw significant increases within 3-6 months.

• Enhance market activity: Lower interest rates make capital more abundant in the market. As some of this capital flows into the crypto world, it will improve the market liquidity and trading volume of cryptocurrencies. The increase in trading activity will attract more investors to participate in cryptocurrency trading, further promoting market development, and may also intensify market volatility.

• Strengthening demand for safe-haven assets: When CPI data is poor and the economy faces downward risks, interest rate cuts may be seen as a signal of economic instability. At this time, cryptocurrencies, especially Bitcoin, are often regarded by some investors as "digital gold" or safe-haven assets. They may allocate part of their assets to cryptocurrencies to hedge against potential economic or market risks, which can also provide certain support for the crypto world prices.

• Reduce financing costs: For projects in the crypto world, financing costs may decrease in a lower interest rate environment. This is beneficial for project parties to carry out business activities, conduct technological research and development, and expand the market, thereby promoting the development of the entire crypto world ecosystem, which is advantageous for the crypto world in the long run.