Market Overview
Bitcoin advanced 2.5% to $63,846.0 by 09:57 ET (13:57 GMT) following the release of U.S. consumer‑price data that showed a 0.4% month‑over‑month decline in June, the sharpest drop since April 2020. Core CPI was flat after a 0.2% rise in May, beating forecasts for a 0.1% headline decline and a 0.3% core increase. Year‑over‑year, headline inflation eased to 3.5% and core inflation to 2.6%, both below expectations of 3.8% and 2.9% respectively.
Monetary Policy Implications
Traders priced in a September Federal Reserve rate hike but trimmed the probability to 63% from over 75% a day earlier, according to CME’s FedWatch tool. The Fed’s target range remains 3.5%‑3.75%. Fed Governor Christopher Waller reiterated that several more months of improving data would be required before he is convinced inflation is on a sustainable path to the 2% target.
Geopolitical Context
U.S.–Iran tensions escalated over the Strait of Hormuz. President Donald Trump affirmed the waterway would stay open, warned of military force to protect shipping, and announced a 20% fee on cargo transiting the strait. The U.S. conducted a third consecutive day of attacks on Iran, prompting Tehran to strike ships in the Hormuz and target U.S. bases in the Middle East. Oil prices rose sharply on the developments, raising concerns about energy‑driven inflation that could further pressure the Fed to hike rates.
Crypto Market Reaction
The combination of softer inflation data, lingering rate‑hike expectations, and heightened geopolitical risk limited broader crypto enthusiasm. Spot Bitcoin exchange‑traded funds (ETFs) recorded $424.7 million of net outflows on Monday, marking the eighth week of outflows in nine weeks, according to SoSoValue data. The sustained capital withdrawals reflect investors’ reduced appetite for non‑yielding, speculative assets.
Corporate Activity – Strategy Inc.
Strategy Inc (NASDAQ:MSTR) disclosed that between July 6 and July 12 it raised approximately $466.7 million by selling Class A common stock, without purchasing any Bitcoin during the same period. The company’s last Bitcoin sale occurred at the beginning of July, when it disposed of 2,225 coins. Strategy has been financing its Bitcoin purchases primarily through debt and preferred‑stock issuances and now faces upcoming dividend and debt‑repayment obligations. Bitcoin is trading roughly 50% below its October record high, underscoring the pressure on the firm’s Bitcoin‑holding strategy.
Broader Crypto Price Movements
Other major cryptocurrencies posted modest gains: Ether rose 5% to $1,870.11, XRP increased 2.2% to $1.0991, BNB gained 1.5%, Cardano climbed 2.3%, Solana rose 1%, Dogecoin advanced 1.8%, and the meme token TRUMP fell 1.1%.
Outlook
Investors remain cautious on speculative assets as the Fed’s rate trajectory and ongoing U.S.–Iran confrontations create an environment of heightened uncertainty for the cryptocurrency market.