Bitcoin spikes toward $80K as US CPI data delivers new 22-year high in bond yields
Bitcoin briefly climbed above $79,000 on Friday after US Consumer Price Index data largely matched expectations, sending stocks higher and bond yields volatile. Core CPI rose 0.3% month-on-month and headline CPI was 3.4% year-on-year, prompting traders to increase bets on a September Fed rate hike.
Why It Matters
The CPI print reinforced market expectations for tighter Federal Reserve policy and triggered sharp moves across asset classes — a dynamic that can both support and pressure risky assets like Bitcoin depending on how bond yields evolve. How yields and planned Treasury operations interact will shape near-term crypto and equity performance.
Key Facts
- Bitcoin price reaction: Briefly rebounded past $79,000 after dropping to $76,000, gaining more than 3% on the day.
- Headline CPI (YoY): 3.4% (August).
- Core CPI (month-on-month): 0.3% vs. 0.2% expected.
- Fed hike odds (Sep. 16 meeting): Probability of a 25 bp hike rose to 85% from 60% a week earlier (CME FedWatch).
- US 30-year Treasury yield: Reached its highest level since June 2004 before settling at 5.309%.
Bitcoin briefly reclaimed levels above $79,000 on Friday after the US Consumer Price Index broadly met forecasts, a move that coincided with a late-day rebound in equities and sharp swings in bond markets. BTC/USD initially slid to about $76,000 but then reversed, ending the session up roughly 3% as traders processed the August inflation figures. The Bureau of Labor Statistics reported headline CPI of 3.4% year-on-year and core CPI — which strips out food and energy — rose 0.3% month-on-month, a tenth of a percentage point above consensus. Energy costs played a meaningful role in the monthly increase: gasoline rose 3.9% in August and the broader energy index climbed 2.1%, a reflection in part of elevated crude prices around $100 per barrel and geopolitical tension in the Middle East. Markets reacted swiftly. The S&P 500 and the Nasdaq both moved into positive territory after a weak open, up about 1.0% and 1.1% respectively at the time of reporting, while Treasury yields saw heightened volatility. The 30-year US yield spiked to its highest since June 2004 before pulling back to 5.309%, and traders boosted the odds of a 25-basis-point Federal Reserve rate increase at the Sept. 16 meeting to roughly 85% according to CME Group’s FedWatch tool. Analysts warned the jump in yields could be a headwind for Bitcoin. QCP Capital noted that rising risk-free rates without accompanying nominal growth is a difficult mix for crypto, potentially undermining narratives that supported Bitcoin’s late-August rally. However, QCP also suggested that ongoing Treasury buyback operations could eventually provide liquidity that supports markets once those interventions take hold.
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