Bitcoin rose on Wednesday, briefly touching levels near $65,000 as a softer-than-anticipated U.S. consumer price index reading reduced immediate market anxiety about an upcoming Federal Reserve rate increase.
By 02:00 ET (06:00 GMT), Bitcoin had climbed 3.7% to $64,938.1 and registered an intraday high of $65,055 - its strongest level since June 22. The move built on momentum from the previous session after the subdued inflation data tempered short-term expectations for tighter monetary policy.
Inflation data cools rate-hike bets
The softer CPI print helped ease concerns that the Fed was on the verge of hiking interest rates, a development that has weighed heavily on speculative, non-yielding assets such as cryptocurrencies. Higher interest rates increase the opportunity cost of holding risk assets relative to government debt, a dynamic that had pressured the crypto sector in recent weeks.
Despite the short-term relief, caution persisted about the prospect of higher rates over a longer horizon. Fed Chair Kevin Warsh, in his first Congressional testimony, reiterated the central bank's commitment to a 2% annual inflation target. Warsh's remarks, together with recent hawkish commentary from other Fed officials, signaled that the central bank still retains a tightening bias.
Analysts noted that a renewed pickup in U.S. inflation - particularly if driven by energy market disruptions in the Middle East - could revive concerns about further rate increases and once again put pressure on speculative assets.
U.S.-Iran conflict limits upside
Cryptocurrency gains were further constrained by escalating military activity between the United States and Iran. The two sides exchanged strikes in the early hours of Wednesday, and there were few indications of de-escalation.
U.S. President Donald Trump said his administration had been in contact with Iran but warned that strikes would continue and could intensify until a deal is reached. Iran retaliated by launching missile and drone attacks on multiple Gulf countries that host U.S. bases, sustained strikes on commercial shipping lanes in the Strait of Hormuz, and threatened to disrupt additional key shipping channels in the region.
Those developments pushed oil prices higher and heightened concerns that energy-driven inflation could re-emerge, a scenario that markets see as potentially supportive of renewed rate-hike expectations.
Altcoins follow Bitcoin higher
Broader digital-asset markets recovered some losses on Wednesday, though most tokens remain substantially down year-to-date amid declining retail and institutional demand and a rotation of investor appetite toward artificial intelligence-related equities.
- Ether rose 5.8% to $1,886.86.
- XRP increased 3.8% to $1.1101.
- Solana and Cardano gained 4.4% and 3.6%, respectively.
- BNB added 2%.
- Among memecoins, Dogecoin advanced 3% and $TRUMP rose 2.3%.
While these moves marked a recovery from recent declines, market participants remain attentive to the twin risks of renewed inflationary pressure from oil-market disruptions and the Federal Reserve's continued tightening bias.
Reported by Maya Rios.