Bitcoin Rises After July CPI Matches Wall Street Forecasts

Bitcoin rose roughly 2% in the hour after the release, retaking the $62,000 level. Ether and other large-cap tokens followed, with total crypto market capitalization adding about $30 billion, according to CoinGecko data.

At 2.5%, core CPI is closer to the Federal Reserve's 2% target than at any point since early 2021. The headline rate, while still above target, has now fallen from 9.1% in June 2022 to 3.4%. The direction supports the case for rate cuts later this year, or at minimum a prolonged pause in hikes. Looser financial conditions tend to favor speculative assets, including cryptocurrencies.

A single CPI print does not make a trend. June's negative reading was unusually low, and categories such as shelter and services could show stickiness in coming months. If inflation data surprises to the upside, the same institutional flows that lifted crypto on Tuesday could reverse. The next CPI release is scheduled for September 13.

Traders said the in-line print cleared a short-term hurdle. “The market was prepared for anything from a hot number to a soft one,” one cryptocurrency derivatives trader said. “Getting exactly what was expected lets people focus on the next catalyst.”