Bitcoin Holds Near $63.5K as July PPI Comes in Below Expectations

An analysis of the U.S. CPI report released Wednesday indicates that underlying inflationary pressures remain persistent despite the softer headline reading.

September Rate-Hike Expectations Fall Further After PPI

A combination of Wednesday’s cooler-than-expected consumer inflation data and Thursday’s weaker-than-forecast producer inflation report has further reduced expectations for a Federal Reserve rate hike in September.

CME FedWatch data, which reflects trader positioning in short-term interest-rate futures, now shows the probability of a September hike at just 32%. A month ago, the odds were above 75%.

However, traders continue to expect tighter monetary policy later in 2026. The probability of at least one rate hike before the end of the year remains close to 70%.

Sharplink Plans $200M ETH Allocation Through Lido

Ethereum-focused digital asset treasury firm Sharplink (SBET) plans to allocate $200 million worth of ETH to Lido’s liquid-staking protocol in an effort to increase returns on its holdings.

Under the arrangement, Sharplink will receive wrapped staked ether (wstETH), representing ETH deposited with Lido along with the staking rewards generated by those holdings. Anchorage Digital will provide custody for the tokens, according to the company’s Thursday announcement.

The strategy allows Sharplink to earn staking income while maintaining an asset that can be deployed across decentralized finance applications, including as collateral. The move expands the company’s existing staking and restaking strategy.

“This expands our efforts to make our ETH more productive,” CEO Joseph Chalom said. Lido reported that approximately $16.5 billion worth of ETH is currently staked through its protocol, with around $10 billion of wstETH being used as collateral.

U.S. Producer Inflation Comes in Below Expectations

The Producer Price Index remained unchanged in July, coming in below economists’ forecast for a 0.2% increase. The reading followed a 0.1% decline in June.

On an annual basis, producer prices increased 4.7%, below the 4.9% consensus estimate and down from 5.5% in June.

Core PPI, which excludes food and energy prices, increased 0.2% during the month, compared with expectations for a 0.3% rise and June’s 0.4% increase.

Core producer inflation rose 4.2% year over year, matching forecasts but slowing from the 4.7% annual increase recorded in June.

Elsewhere, U.S. initial jobless claims increased to 209,000 from 200,000 the previous week, slightly above economists’ expectations of 202,000.

Bitcoin remained relatively unchanged around $63,500 following the data.

Trader Places $1M Bet on Bitcoin Breaking $65.5K

One trader has made a sizable bullish wager that Bitcoin will climb above $65,500 by Saturday.

According to Laevitas data, the trader spent approximately $1.07 million on call options giving them the right to purchase 4,054 BTC at a $65,500 strike price. The contracts expire on August 15, just two days after the trade.

With Bitcoin trading between roughly $63,500 and $63,800, BTC would need to gain more than $1,700-$2,000 within two days for the options to finish in the money.

The trade reflects a strong short-term bullish view that Bitcoin could break higher before the options expire.

PPI Becomes the Market’s Next Major Catalyst

U.S. producer inflation for July emerged as a key market focus after Wednesday’s CPI report broadly matched expectations. The latest data was also being closely watched following last week’s weaker-than-expected U.S. employment figures.

The combination of those reports had pushed the probability of the Federal Reserve keeping interest rates unchanged to around 63%, making the PPI release an important catalyst for financial markets.

Bullish Expected to Report Q2 Earnings

Bullish (BLSH), the parent company of CoinDesk, is scheduled to release its second-quarter earnings later Thursday. Analysts expect the company to report revenue of approximately $88.44 million and earnings per share of $1.13.

Bullish shares have declined 41.35% over the past three months. The company’s IPO took place exactly one year ago, while the stock remains roughly 80% below its record high after closing at $24.63 on Wednesday. Shares were about 1% higher in premarket trading.

Smaller Crypto Tokens Outperform Major Coins

While Bitcoin, Ether, Solana and XRP remain largely directionless, several smaller cryptocurrencies have posted stronger gains.

OKB, MNT and VVV have each climbed at least 6% over the past 24 hours, placing them among the strongest performers within the top 100 cryptocurrencies by market capitalization.

The gains do not appear to be driven by significant capital rotation away from major cryptocurrencies. Bitcoin’s dominance remains around 59%, roughly where it has stayed since July.

Bitcoin dominance measures BTC’s share of the total cryptocurrency market capitalization.

Bitcoin Remains Choppy as Underlying Inflation Stays Sticky

Macroeconomic writer Mike “Mish” Shedlock argues that underlying U.S. inflation remains more persistent than Wednesday’s CPI reading suggests.

The July CPI report showed inflation easing, partly helped by a temporary decline in energy prices. However, Shedlock noted that falling gasoline and energy costs can make the headline inflation figure appear weaker than underlying price pressures.

He also argued that food prices may be understated by Bureau of Labor Statistics methodology and that the CPI does not fully capture certain housing-related expenses, including property taxes, insurance and home prices.

These factors may help explain why the modest monthly increase and annual decline in CPI did not produce a significant drop in the U.S. Dollar Index. As a result, the softer inflation report provided limited support for Bitcoin.

BTC continues to trade erratically below the $64,000 level.

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