U.S. headline inflation matched forecasts in July, holding at 3.4% year-over-year, and bitcoin barely moved on the release. The bigger story sits in ETF flows: spot bitcoin funds just posted their strongest week since April, yet bitcoin still lags the record highs set across global equities.
Bitcoin fell from $64,400 to $64,080 within minutes of the Consumer Price Index release, then stabilized as the numbers matched economists' forecasts. The asset traded still largely flat over 24 hours near $64,000.
CPI matches forecasts on both counts
The Consumer Price Index rose 0.1% in July from June, in line with the forecast for a 0.1% increase. On a year-over-year basis, CPI rose 3.4%, matching forecasts and edging below June's 3.5%. Core CPI, which excludes food and energy, rose 0.2% monthly and 2.5% annually, both figures also in line with analyst estimates.
Treasury yields stayed under pressure. The two-year yield hovered at 4.19%, down 3.6 basis points on the day, while the 10-year stood at 4.66%, down three basis points. Nasdaq 100 futures traded 0.7% higher after the release.
Rate-hike odds ease after the jobs miss
The report carried added weight after the U.S. economy unexpectedly shed 23,000 jobs in July, far short of forecasts. Traders now price a 44% probability of a Federal Reserve rate hike at the September meeting, down from 48% before the CPI print and from 54% a week earlier, according to the CME FedWatch Tool. Bitcoin had jumped to $64,400 just minutes before the data landed, then gave back a few hundred dollars once the numbers matched expectations.
ETF inflows rebound from a brutal June
Bitcoin's price action contrasts with a recovering ETF picture. U.S. spot bitcoin ETFs suffered roughly $4.6 billion in net outflows during June, their worst month since the products launched in January 2024. Demand has since turned: the funds attracted approximately $854 million in the week ending August 7, their strongest weekly inflow since April, with BlackRock's IBIT accounting for a substantial share.
Even so, bitcoin remains well below the levels reached earlier in the year. Indices like the FTSE 100 and DAX have set record highs in recent weeks. Renewed ETF demand has not yet translated into a decisive bitcoin rally. Still, analysts remain adamant that the CPI data is key to bitcoin's next big move.
Sources: CoinDesk, CryptoPotato, IG
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