Key points:
- Bitcoin reacts to fresh PPI data.
- Prices jump above $61,000 a pop.
- Consumer inflation data looms today.
Markets are increasingly optimistic that Fed will move to cut rates in September — with some pricing in a jumbo-size rate cut.
- Bitcoin prices BTCUSD peaked above $61,000 early Wednesday as traders were digging the OG token out of a hole that went as deep as $49,000 less than two weeks ago. The comeback was boosted yesterday by an optimistic reading into a key economic report. The producer price index, or PPI, rose 0.1% in July from the prior month, which undershot analysts’ expectations. The PPI measures prices charged by businesses.
- The better-than-expected print eased concerns over a stalling economy and — more importantly — brought back the feelgood factor for upcoming cuts to interest rates. Markets are now eyeing not one 25-bps trim to borrowing costs; rather, a jumbo, half-point cut to interest rates is being priced in when the Federal Reserve meets again in mid-September. A lot can happen before that as the news keeps rolling in — consumer inflation data is coming today.
- Bitcoin prices are becoming increasingly sensitive to economic data as the crypto space gets more and more enmeshed in the global markets. Now that Bitcoin boasts its very own spot exchange-traded funds, and Ether followed suit shortly after, digital assets are being bought and sold not just by niche tech-savvy crypto circles, but by the largest investment firms and asset managers out there, such as BlackRock and Fidelity.