Bitcoin Gains Toward $65K as Inflation Slowdown Cools Rate-Hike Expectations

The June CPI release sharply reduced expectations of a near-term rate hike, with probabilities dropping from 43% to 13%. Investors are now turning their focus to the September FOMC meeting for clearer signals on positioning.

Bitcoin climbed to around $64,800 on Wednesday, marking its strongest session in weeks after U.S. inflation came in cooler than forecast. The softer data led traders to abandon bets on a Federal Reserve rate increase this month.

Headline inflation fell from 4.2% to 3.5%, while core inflation—excluding food and energy—declined from 2.9% to 2.6%. The easing in core prices points to broader disinflation, weakening the case for further monetary tightening.

Following the data, expectations for a rate hike dropped sharply, and the two-year Treasury yield slipped by six basis points.

Bitcoin gained 3.6% over the past 24 hours and is up 3.3% for the week, with roughly $31 billion in trading activity. Ether outperformed, rising to nearly $1,880—up 5.3% on the day and 7.1% over the past week. Other major tokens also advanced: HYPE climbed 6.4% to $67, XRP gained 3.7% to $1.10, Solana rose 3.6% to $78, Dogecoin added 2.9%, and BNB edged up 1.9% to $579.

Higher interest rates typically weigh on bitcoin and other risk assets, as rising yields on cash and government bonds make safer investments more attractive compared to volatile, non-yielding assets like crypto.

Conversely, cooling inflation reduces the need for further rate hikes, easing that pressure and encouraging capital to rotate back into riskier markets.

In commodities, Brent crude rose 1% to above $85 per barrel, extending gains for a third straight day. Oil has surged 11% over two sessions amid renewed geopolitical tensions, including U.S. threats of further strikes on Iran and a renewed blockade of Iranian shipping through the Strait of Hormuz.

Equities mirrored the move. MSCI’s Asia Pacific index rose 2.3%, its strongest gain in a month, led by technology stocks. South Korea’s Kospi surged 8.2%, reclaiming its status as the top-performing major index this year, while SK Hynix jumped 13% in Seoul after its U.S.-listed shares surged 27%.

Jeff Ko, chief analyst at CoinEx, said bitcoin continues to behave like a rate-sensitive risk asset rather than a macro hedge. He noted that while the inflation data eases immediate downside pressure, it does not yet signal a sustained breakout.

With core inflation still above the Federal Reserve’s 2% target, the data gives policymakers room to pause rather than cut rates. Ko highlighted the September FOMC meeting as the next key macro catalyst, along with movements in the U.S. dollar and the durability of bitcoin ETF inflows.