At the time of publication on Thursday, the price of bitcoin fell to $63,500: Bitcoin lost more than 0.5% for the day and nearly 2% for the week, even though the latest US inflation report matched forecasts and eased some market tension.
In Brief
- Bitcoin dropped to around $63,500 after the expected US inflation report: the data calmed the market but did not give cryptocurrencies a strong reason to rally.
- July inflation matched forecasts, causing traders to price in a lower probability of a Fed rate hike in September.
- Stock markets reacted more strongly than cryptocurrencies: the MSCI Asia Pacific index rose nearly 1%, and South Korea’s Kospi gained about 4%.
Inflation Eased Risk but Did Not Trigger a Rally
July figures almost exactly matched economists’ expectations. Overall inflation rose 0.1% for the month and 3.4% year over year. The core index, which excludes food and energy, added 0.2%, while the annual rate slowed to 2.5%.
This was enough to reduce fears of another rate hike. After the data was released, the futures market put the probability of a September Fed move at about 38%, down from 46% before the statistics.
Asset reaction was muted. Gold rose 1.3%, Ether gained just over 1%, Bitcoin climbed about half a percent after the data, and S&P 500 futures rose 0.2%. But the crypto market did not get a sustained boost.
On a practical level, this is seen in the BTC/USD pair: Bitcoin price is calculated through the United States dollar, so expectations for the dollar rate are quickly reflected in quotes. For cryptocurrency exchanges, including Coinbase, such periods become a test of market liquidity: when there is no major surprise, trading is more cautious, and market capitalization and sector capitalization change without a clear trend.
Altcoins Traded Mixed
Against the general backdrop, HYPE from Hyperliquid stood out: the token rose more than 3% to reach $56, though it barely changed for the week. Tron gained slightly and traded just below 34 cents, maintaining a weekly increase of about 2%.
For the largest coins, the picture looked like this:
- Dogecoin: about 7 cents, almost minus 3% for the day.
- XRP: $1, more than minus 1% for the day and nearly minus 5% for the week.
- BNB: $610, more than minus 1% for the day.
- Solana: about $76, less than minus 1% for the day.
- Ether: about $1,880, almost unchanged for the day.
In such conditions, cryptocurrency remains dependent not only on its own factors. The Bitcoin blockchain, mining, transaction authentication, and the network’s role as a payment system do not change because of a single CPI report, but the valuation of Bitcoin as an asset in the market depends on rates, liquidity, and risk appetite. In market (economics) terms, this is a typical situation where a macro signal is more important than the internal dynamics of the cryptocurrency sector.
Next Market Benchmarks
Gabe Selby, head of research at CF Benchmarks, believes that Bitcoin reacts most strongly to inflation data when it forces the market to reassess rate expectations. According to his estimate, in three out of the last nine releases where inflation was below forecasts, Bitcoin’s average gain was 3.25%.
The negative surprise on July 14 was offset by a 4.24% rally. Selby emphasizes: a report in line with expectations can remove the risk of a worst-case scenario, but a real move needs an unexpected factor.
A report that matches forecasts can remove tail risk. But for a catalyst to appear, the market needs a real surprise.
In Selby’s view, the Fed can now afford a pause. Housing costs rose just 0.1%, energy prices fell 1.5%, gasoline dropped 2.9%, and some goods categories are compared to last year’s price spikes caused by tariffs.
The upcoming events traders will be watching:
- The central bankers’ meeting in Jackson Hole at the end of the month.
- The employment report on September 4.
- The consumer price index release on September 11.
Stock Markets Reacted More Confidently
Stocks took the statistics noticeably better than cryptocurrencies. The MSCI Asia Pacific index rose nearly 1%, mainly thanks to Samsung Electronics and SK Hynix. South Korea’s Kospi jumped almost 4% and entered a technical bull market, gaining 22% in ten days.
But the overall picture remained uneven. Cisco shares fell more than 4% in after-hours trading following weak financial results. Cerebras Systems stock lost 17% due to declining equipment sales.
Brent crude broke a six-day rally and retreated from levels where it had previously approached $90 a barrel. Pressure increased after a statement by Islamic Revolutionary Guard Corps adviser General Mohammad Reza Naqdi that Iran is preparing to conduct operations on US territory under a new military doctrine.
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