Bitcoin fell to approximately $63,500 on Thursday following the release of July U.S. inflation data that matched economist forecasts, easing recession fears but failing to ignite a broad cryptocurrency rally.
The July headline inflation report showed a 0.1% monthly increase and 3.4% annual increase, precisely aligned with expectations. Core inflation rose 0.2% monthly and 2.5% annually. The in-line result reduced the Federal Reserve’s September rate rise probability from 46% to 38%, yet digital assets remained largely flat or declined.
“An in-line report can remove a tail risk. It takes a genuine surprise to create a catalyst,” said Gabe Selby, head of research at CF Benchmarks.
Bitcoin gained only 0.5% following the inflation release. Ether rose 1%, while gold posted a 1.3% increase. The S&P 500 futures advanced 0.2%. Most major cryptocurrency tokens declined on the day. Hyperliquid’s HYPE token rose 3% to $56, Tron gained 2% over seven days to 34 cents, and XRP fell 5% weekly to $1. Dogecoin dropped 3% daily to 7 cents, BNB declined 1% to $610, and Solana fell 1% to $76. Ether traded at $1,880.
Global stock markets outperformed their crypto counterparts. The MSCI Asia Pacific index gained 1%, while South Korea’s Kospi rallied 4% and posted a 22% increase over ten days. Brent crude reached $90 per barrel.
Historical context
Bitcoin has historically gained an average of 3.25% across three occasions in the past nine inflation releases when data came in below expectations. On July 14, a downside inflation surprise triggered a 4.24% Bitcoin rally.
The inflation report showed disinflationary pressures in shelter costs, which rose 0.1% monthly, energy prices, which fell 1.5%, and gasoline, which declined 2.9%.
The next jobs report is scheduled for September 4, followed by the next inflation release on September 11. Central bankers are expected to gather at Jackson Hole later in August.
