Bitcoin tops $64,000 as U.S. inflation cools, Fed rate-hike odds collapse
In brief
- Bitcoin climbed to $64,800 as June headline inflation fell to 3.5% from 4.2%, signaling lower rate-hike odds
- Fed rate-increase odds collapsed from 43% to 13%, weakening the case for holding cash over risk assets
- Ether surged 5.3% to $1,880; oil and broad risk assets rallied on cooler inflation expectations
The Inflation Print Broke the Hike Trade
Bitcoin climbed to near $64,800 on Wednesday, its best session in weeks. The move came on the back of cooler-than-expected inflation data. Core inflation eased to 2.6% from 2.9%, though it remains above the Fed's 2% target. The two-year Treasury yield dropped six basis points, reflecting expectations for a less aggressive monetary policy path.
Bitcoin's rally was swift and broad. The asset rose 3.6% over 24 hours and is up 3.3% on the week. It wasn't alone. Ether was the standout at nearly $1,880, up 5.3% on the day and 7.1% over seven sessions. Broader risk markets surged alongside crypto. MSCI's Asia Pacific gauge climbed 2.3%, its biggest advance in a month. South Korea's Kospi jumped 8.2%, retaking its position as the world's best-performing major benchmark this year.
The move reflects a simple mechanic: cooler inflation means the Fed has less reason to raise, so that pull weakens and money flows back the other way.
What's Next
The June CPI print pulled rate-hike odds from 43% to 13%, but analysts are already looking ahead. The September FOMC meeting is the next real macro test for bitcoin positioning, according to market observers. Between now and then, traders will watch for fresh inflation data and Fed communications to gauge whether the disinflationary trend holds.
Commodities caught the bid as well. Brent crude advanced 1% to above $85 a barrel after President Trump threatened further strikes on Iran. Crude has now surged 11% in two sessions.
On-chain, the relief rally showed up in trading volumes. CEX spot trading volumes climbed 15.3% to $1.11T in June, the first monthly increase in five months. RWA perpetual volumes surged to a record $311B in June, signaling renewed risk appetite across the crypto derivatives market.
