Bitcoin Surpasses $65,000, Driven by Positive Inflation Data

Bitcoin broke through the $65,000 mark in early Wednesday trading, mainly driven by US Consumer Price Index (CPI) and Producer Price Index (PPI) data for June that came in lower than expected. John Williams said inflation has peaked and is expected to decline gradually. Related futures contracts rose slightly, with Nasdaq 100 futures up about 0.5%. Spot Bitcoin ETFs recorded net inflows of about $181 million on Tuesday, while Ethereum ETFs saw an increase of about $58 million.

Geopolitically, a new round of airstrikes was launched against specific targets, but oil prices only rose modestly, and the market reaction remained relatively contained. In company news, CleanSpark shares were up about 14% before the market opened after signing a $6.6 billion data center deal, while PayPal shares rose more than 21% before the market opened on acquisition rumors. Circle Financial shares fell about 4% after a credit rating downgrade.

This rise in Bitcoin prices is mainly tied to the latest US inflation data coming in lower than market expectations, which has reduced pressure for rate hikes in the short term, providing support for risk assets. ETF funds have seen a temporary rebound, indicating a slight recovery in institutional participation. However, geopolitical tensions could continue to affect market sentiment, and fluctuations in oil prices and shifts in rate-hike expectations may keep creating uncertainty. Overall, the market shows different characteristics due to the combined effects of macroeconomic data and sector rotation; short-term volatility still needs to be watched.

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