Bitcoin Approaches $65K as Softer U.S. Inflation Dims Fed Hike Bets

The June CPI reading sharply reduced expectations of a rate hike, with probabilities dropping from 43% to 13%. Analysts are now focusing on the September FOMC meeting for clearer signals on market positioning.

Bitcoin surged to around $64,800 on Wednesday, marking its strongest performance in weeks, after U.S. inflation came in lower than anticipated. The softer data led traders to unwind bets on a Federal Reserve rate increase this month.

Headline inflation for June declined to 3.5% from 4.2%, while core inflation—which excludes food and energy—fell to 2.6% from 2.9%. The easing in core inflation suggests broader price pressures are cooling, weakening the case for further rate hikes.

Following the data release, the implied likelihood of a rate increase dropped sharply from 43% to 13%, while the two-year Treasury yield fell by six basis points.

Bitcoin gained 3.6% over the past 24 hours and is up 3.3% for the week, with trading volume reaching roughly $31 billion. Ether outperformed, climbing to nearly $1,880—up 5.3% on the day and 7.1% over the past week. Other cryptocurrencies also advanced: Hyperliquid’s HYPE rose 6.4% to $67, XRP gained 3.7% to $1.10, Solana increased 3.6% to $78, Dogecoin added 2.9%, and BNB rose 1.9% to $579.

Higher interest rates tend to weigh on bitcoin and other risk assets because rising yields on cash and government bonds offer investors more stable returns, reducing the appeal of non-yielding, volatile assets like crypto.

Conversely, cooling inflation reduces the need for further rate hikes, easing that pressure and encouraging capital to flow back into riskier markets.

In commodities, Brent crude rose 1% to above $85 per barrel, extending its rally to a third straight day. Prices have jumped 11% over two sessions after President Trump threatened additional strikes on Iran and the U.S. reinstated a blockade on Iranian shipping through the Strait of Hormuz.

Equity markets mirrored crypto’s gains. MSCI’s Asia Pacific index climbed 2.3%, its strongest rise in a month, led by technology stocks. South Korea’s Kospi surged 8.2%, reclaiming its spot as the top-performing major index this year, while SK Hynix jumped 13% in Seoul following a 27% surge in its U.S.-listed shares.

Jeff Ko, chief analyst at CoinEx, noted that bitcoin continues to behave like a rate-sensitive risk asset rather than a macro hedge. He said the latest inflation data helps ease short-term downside pressure but does not yet signal a sustained breakout.

With core inflation still above the Federal Reserve’s 2% target at 2.6%, the data gives policymakers room to pause rather than cut rates. Ko highlighted the September FOMC meeting as the next key macro catalyst, along with movements in the U.S. dollar and whether bitcoin ETF inflows remain strong.