After the release of U.S. July inflation data, Bitcoin showed no significant movement. Foreign media reported that the data largely met market expectations, as investors had already positioned themselves in advance, resulting in a muted overall reaction in the crypto market.
On August 12, the U.S. Bureau of Labor Statistics reported that the Consumer Price Index (CPI) rose 0.1% month-over-month in July, after declining 0.4% in June; it increased 3.4% year-over-year, slightly below June’s 3.5%. Core inflation, excluding food and energy, rose 0.2% month-over-month and 2.5% year-over-year.
The data is as expected.
The report noted that housing costs remained the primary driver of price increases for the month. Meanwhile, energy prices declined, with lower gasoline prices contributing to a 1.5% drop in the energy index. Since the overall data did not significantly exceed expectations, markets did not substantially adjust their outlook on the Fed’s policy path.
Typically, a decline in inflation would strengthen market expectations for accommodative policies, benefiting risk assets like Bitcoin. However, this time, those expectations had already been largely priced in before the data release, and the data itself did not provide new momentum.
Bitcoin's price fluctuations are limited.
Foreign media reported that Bitcoin rose only about 0.3% on the day to approximately $63,750, with an intraday trading range of around 1.5%. During the same period, the total market capitalization of the crypto market slightly declined by less than 1%, indicating that capital did not rapidly shift toward more aggressive risk appetite following the CPI data.
The report also noted that Bitcoin has recently remained in a range-bound consolidation. After a noticeable decline in early August, the price has continued to trade below $65,000, as the market lacks sufficiently strong new catalysts.
ETF funds have already priced in expectations.
Foreign media believe that the fund flows into spot Bitcoin ETFs partially explain why the market remained flat despite the positive news. Last week, spot Bitcoin ETFs experienced five consecutive trading days of net inflows, totaling approximately $854 million, marking one of the strongest fundraising periods since May.
This means that some investors had already positioned themselves ahead of the CPI release, anticipating slower inflation and a cooling of rate hike expectations. By the time the data was officially released, the market lacked further justification for a significant upward move.
In addition, the article notes that prediction markets remain cautious regarding Bitcoin’s short-term price movement. Traders are more inclined to bet on continued weak performance rather than a rapid rise to higher levels, reflecting the limited impact of a single macroeconomic data point on the current cryptocurrency market.