Crypto Prices Surge as Soft U.S. Inflation and Fed Uncertainty Spark Risk-On Rally

Crypto markets surged sharply on Wednesday as cooler-than-expected U.S. inflation data and renewed political uncertainty surrounding the Federal Reserve reignited investor demand for scarce, non-sovereign assets like Bitcoin and Ether. The bullish momentum reflected a broader risk-on environment across global markets, with digital assets leading the charge.

Bitcoin jumped more than 4% in 24 hours, breaking above the $95,000 level for the first time in a week and approaching the upper boundary of its January trading range. The rally signaled renewed confidence among traders as easing inflation strengthened expectations that the Federal Reserve will continue cutting interest rates this year. Lower inflation has reduced pressure on U.S. bond yields and improved liquidity conditions, a combination that has historically favored cryptocurrencies and other risk assets.

Ether outperformed Bitcoin, rising over 7% to around $3,330, while major altcoins such as Solana (SOL), Cardano (ADA), XRP, and BNB posted gains of up to 9%. The broad-based crypto rally underscored growing appetite for digital assets amid shifting macroeconomic conditions.

Adding fuel to the rally were reports that the U.S. Justice Department had served grand jury subpoenas on the Federal Reserve earlier in the week. The news unsettled traditional markets, weakened the U.S. dollar, and boosted the appeal of cryptocurrencies as assets perceived to be insulated from central bank and political risk.

The sharp price increase triggered widespread liquidations in crypto derivatives markets. According to Coinglass data, more than $688 million in leveraged positions were wiped out over the past day, with short sellers accounting for roughly $603 million. Nearly 122,000 traders were liquidated as bearish bets unraveled rapidly, including a notable $12.9 million ETHUSDT liquidation on Binance.

Meanwhile, traditional markets reinforced the risk-on sentiment. Asian equities climbed to record highs, silver surged past $90 an ounce for the first time, and gold hovered near all-time highs. Together, these moves suggest investors are increasingly seeking exposure to assets that benefit from looser financial conditions, inflation relief, and ongoing currency uncertainty.