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Bitcoin nears $65,000 as cooling U.S. inflation guts the Fed rate-hike trade
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- DeepHorus
Bitcoin surged to nearly $65,000 on Thursday after U.S. inflation cooled more than expected, sharply reducing market odds of a near-term Federal Reserve rate hike. The leading cryptocurrency climbed about 3.6 percent to $64,800, its best single-day gain in weeks, as traders abandoned bets that the central bank would tighten policy further.
The June consumer price index (CPI) report showed headline inflation slowing to 3.5 percent from 4.2 percent, while core inflationâwhich excludes food and energyâeased to 2.6 percent from 2.9 percent. The decline in core inflation was particularly significant, as it indicated that price pressures were broadening rather than just coming from volatile energy costs. Following the release, implied odds of a rate hike collapsed from 43 percent to just 13 percent, and the two-year Treasury yield dropped six basis points.
Other cryptocurrencies also benefited from the dovish shift in rate expectations. Ether rose 5.3 percent to nearly $1,880, while Solana gained 3.6 percent, XRP added 3.7 percent, and dogecoin climbed 2.9 percent. Total trading volume in Bitcoin surged to $31 billion over 24 hours, reflecting renewed risk appetite across digital asset markets.
The data provided immediate relief for risk assets, as higher interest rates typically push investors toward safe-haven assets like cash and bonds, away from volatile holdings like Bitcoin and stocks. With the Fed now less likely to raise rates, the appeal of yield-bearing instruments diminishes, and capital flows back into cryptocurrencies, equities, and commodities.
"Bitcoin remains a rate-sensitive risk asset rather than a macro hedge," said Jeff Ko, chief analyst at CoinEx. "The CPI print reduces immediate downside pressure without building a durable breakout." Ko noted that core inflation at 2.6 percent is still above the Fed's 2 percent target, giving the central bank room to hold rates steady rather than cut them.
Analysts now look to the Fed's September meeting as the next major test for Bitcoin. The direction of the U.S. dollar and sustained inflows into Bitcoin exchange-traded funds (ETFs) will be critical for a continued rally. Without fresh catalysts, the market may remain rangebound until further macroeconomic signals emerge.
In a related development, centralized exchange (CEX) trading volumes rose for the first time in five months in June. Spot volumes climbed 15.3 percent to $1.11 trillion, while real-world asset (RWA) perpetual volumes hit a record $311 billion, signaling growing institutional participation and market depth.
