Bitcoin has surged past $65,000 following a slowdown in U.S. inflation, prompting renewed interest in cryptocurrency investments.
Bitcoin has surged above $65,000, reaching approximately $65,340, following the release of U.S. inflation data that indicated a slowdown in price growth. This has sparked renewed interest in cryptocurrency investments.
The Consumer Price Index (CPI) for June revealed a decrease in the annual inflation rate from 4.2% to 3.5%, which was below expectations of 3.8%. The core CPI, excluding food and energy, also fell from 2.9% to 2.6%. Additionally, consumer prices dropped by 0.4% month-over-month, marking the most significant decline since April 2020, largely due to lower energy costs.
In response to the CPI announcement, Bitcoin's price jumped from $62,000 to $64,900 within minutes. Ethereum also saw a notable increase, rising over 4% to $1,933. Analyst Darkfost pointed out that Binance experienced $1.2 billion in taker buy volume within the first hour post-announcement, with other exchanges like OKX and Deribit also reporting increased trading activity.
Despite the positive market reaction, Darkfost cautioned that the price movements appear speculative and have yet to establish a lasting trend. Traders are closely monitoring ongoing news to take advantage of the high volatility in the market.
Following the inflation data, new Federal Reserve Chair Kevin Warsh addressed the House Financial Services Committee, discussing the influence of artificial intelligence on the economy as a disinflationary force. However, he stressed that the Fed is not ready to declare victory over inflation and did not indicate any plans for a rate cut.
“Some may look at today’s data and say: ‘Mission accomplished, everything is great.’ I do not see it that way,” Warsh stated.
The likelihood of a rate hike at the forthcoming Federal Reserve meeting on July 28-29 has dropped significantly, from about 42% to 12.3%.
On July 14, Bitcoin exchange-traded funds (ETFs) saw net inflows of $181 million, largely driven by BlackRock's IBIT, which accounted for $139 million of the inflow. This rebound followed a significant outflow of $425 million the previous day. Ethereum funds attracted $58.34 million, also primarily due to BlackRock's ETF, while other funds remained relatively stable.
Since early July, the market has witnessed alternating inflows and outflows in ETFs, reflecting a lack of clear direction. Notably, on July 8, Bitcoin's price had dipped to around $61,700 amid rising geopolitical tensions between the U.S. and Iran.
