The latest CPI data was not good news for $BTC (-2.78%). Core inflation came in slightly higher than expected, thereby increasing the likelihood that the Fed will remain hawkish—just when the market had been hoping for weaker inflation data to serve as a catalyst for a breakout above $80,000. This sentiment is also reflected in fund flows: After about $1.3 billion in inflows into digital investment products last week, outflows of $243 million have been recorded so far this week.
The real catalyst, however, could come from the U.S. Treasury. Despite larger purchases at the long end, the expanded bond buyback program has so far failed to push yields down noticeably—a sign of the enormous pressure on the bond market caused by fiscal concerns and a persistently high term premium. If this continues, pressure will mount on Treasury Secretary Bessent to intervene more aggressively—with rising oil prices breathing down his neck, the risk of a significantly larger, “bazooka-style” purchase program increases.
Such an escalation would further fuel the debasement narrative, which has recently been $BTC (-2.78%) and $GOLD . The situation for #bitcoin is thus two-sided: in the short term, the CPI figure is a headwind, but the bond-buyback program—which has been ineffective so far—could become one of the stronger catalysts in the medium term.
(Author: James Butterfill, CoinShares’ Head of Research)
You can invest in Bitcoin through the following vehicle: $BITC (-3.16%)
