Bitcoin Price Spikes, Shrugs off Hot US Inflation Data
Bitcoin Magazine Bitcoin Price Spikes, Shrugs off Hot US Inflation Data The price of bitcoin is up, despite the fact that an interest rate hike could be just around the corner. This post Bitcoin Pri...
The price of bitcoin is up, despite the fact that an interest rate hike could be just around the corner.
Bitcoin’s price rose on Friday — despite data revealing that U.S. inflation had risen.
The biggest cryptocurrency by market cap was recently trading for close to $78,749 after jumping 2% over a 24-hour period. At one point on Friday morning in New York, bitcoin rose as high as $79,607.
Bitcoin’s price spike came after news dropped that U.S. consumer prices accelerated in August, reinforcing expectations that the Federal Reserve will raise interest rates next week.
The consumer price index, excluding food and energy, climbed 0.3% in August from a month earlier, which was higher than expected.
Inflation in the U.S. has been difficult to tame due to the war with Iran, which has lifted oil prices, in turn raising the costs of food, gasoline and other goods.
Higher inflation typically means the Federal Reserve will raise interest rates, which in turn could stop bitcoin’s price climbing higher.
According to CME’s FedWatch tool, traders think there is a 85% chance interest rates will be higher by next week. The Federal Reserve will meet next week and reveal what it will do with borrowing costs.
Bitcoin has typically performed well in a low interest rate environment because it means people can buy more of the cryptocurrency with increased liquidity.
Federal Reserve Chairman Kevin Warsh, who took the helm in January, last month gave his first speech as head of the U.S. central bank and said he had “more work to do” to fight inflation.
The U.S. is currently in the grips of an affordability crisis and rising oil prices are a hot topic ahead of the midterm elections.
U.S. President Donald Trump has reassured voters that prices will get under control and repeatedly put pressure on the central bank to lower interest rates.
Bitcoin in August had its biggest run in years following positive regulatory news and an announcement from the U.S. Treasury.
Treasury Secretary Scott Bessent announced the department would double the size of its long-dated bond buybacks, helping non-yielding assets like bitcoin and gold. The cryptocurrency then benefited from President Trump urging lawmakers to get key crypto legislation, the Clarity Act, over the line.
Asanat Analysis — Why it matters
Bitcoin's resilience against hawkish inflation data signals a structural shift in how markets are pricing the asset—no longer as a pure inflation hedge, but as a policy-sensitive macro instrument tied to real-world regulatory tailwinds. The spike despite 85% odds of Fed tightening suggests traders are discounting rate hikes into the price already, or weighting pro-crypto legislative momentum (Clarity Act) and Treasury asset-purchasing expansion more heavily than traditional macro headwinds.
This disconnect between inflation/rates and price action matters because it reveals bitcoin's current positioning as risk-on correlated with equity indices and sentiment around permissive policy, rather than defensive. The Treasury's bond buyback expansion and Trump administration pressure on the Fed to ease creates a policy floor under liquidity-sensitive assets. However, if inflation remains sticky and the Fed holds rates higher for longer regardless of political pressure, this complacency could reverse sharply.