Every time the US CPI data is released on the eve, the entire crypto circle and stock market are on edge. As soon as the data is out, the market immediately either cheers with excitement or falls into a trough, with coin prices and stock prices fluctuating like roller coasters. Last week, right after the CPI was announced, backend issues exploded: "Why can one inflation data trigger two markets to fluctuate violently at the same time?" "Cryptocurrencies claim to be decentralized, so why are they still constrained by Fed data?"

Basically, this is the essence of capital pursuit of profit. CPI, or Consumer Price Index, primarily measures the rate of price increases. The reason this indicator can serve as a "market barometer" is because it directly influences the Federal Reserve's monetary policy decisions. CPI data exceeding expectations? The Fed is likely to continue raising interest rates or keep rates high to curb inflation. Data below expectations? The market interprets it as easing inflation pressures, and the rate hike cycle may come to an end, with easing rate expectations emerging.

Whether in crypto or traditional finance, at the core, it’s all driven by capital. Interest rates are the "conductor" of capital—this is crucial.

Looking at the traditional stock market makes it clear. Listed companies, especially growth-oriented enterprises, rely on financing to expand production. When interest rates rise, the cost of financing increases, profit margins are squeezed, and stock prices fall accordingly. Conversely, lowering interest rates reduces financing costs, making it easier for funds to flow into the real economy, and stock markets usually rise. The logic in the crypto market is actually the same—when interest rates are high, investors tend to deposit money in banks to earn interest, reducing the attractiveness of risk assets, leading to capital outflows from crypto; when interest rates are low, idle funds increase, and some flow into high-risk, high-reward assets including crypto.