Bitcoin price reaction to US inflation data
Bitcoin fell below the psychologically important $60,000 level, trading at $59,936.45 as of 17:53 ET (21:53 GMT), representing a 1.7% decline and bringing it close to the one‑and‑a‑half year low recorded earlier in June.
US core personal consumption expenditures (PCE) index
The Federal Reserve’s preferred inflation gauge showed the core PCE index rising 0.3% month‑on‑month and 3.4% year‑on‑year, the strongest core reading since October 2023. The headline (all‑items) PCE index accelerated to a 4.1% annual rate, the highest level since April 2023, driven largely by an energy price surge linked to the Iran war.
Federal Reserve policy tone
In the week following the data, the Fed’s Federal Open Market Committee removed language that had hinted at future rate cuts, replacing it with an unequivocal commitment to “deliver price stability.” The statement also eliminated a previously signaled rate cut for the year and flagged the possibility of an additional hike. Several officials had dissented at the April meeting over forward guidance they considered too dovish. While Fed officials typically look past supply‑driven spikes, concerns are growing that inflation may be broadening beyond energy, with tariffs adding further upward pressure.
Bitcoin exchange‑traded fund (ETF) outflows
Spot Bitcoin ETFs experienced an outflow of $469 million on Wednesday, the largest since June 2, extending a streak of seven consecutive weeks of net withdrawals. Glassnode data indicated that Bitcoin continued to trade at a significant discount on Coinbase relative to the global average, suggesting limited retail demand in the United States.
Broader cryptocurrency market impact
Altcoin prices also retreated after the PCE release. Ether declined 2.5% to $1,575.49. Binance Coin (BNB) slipped 0.6%, XRP fell 3.2%, Solana dropped 1.1%, Cardano lost 2.2%, Dogecoin decreased 1.8%, and the meme token $TRUMP fell 3.3%.
Report contributors
The article was contributed by Vahid Karaahmetovic and Anuron Mitra.