Bitcoin's rally cooled on Tuesday as investors digested a weaker-than-expected U.S. inflation report that was still not enough to prompt a Federal Reserve rate cut. The largest cryptocurrency traded at $64,678, up 3% over 24 hours but down 0.5% since midnight. Ether also pulled back 0.5% after a 4.7% daily gain, as the market reassessed macro signals.
Inflation data fails to spark rate cut expectations
U.S. producer price inflation data released Tuesday showed a softer reading, but Federal Reserve Chair Kevin Warsh has indicated that one favorable report is not enough to declare victory. The central bank remains data-dependent, and a July rate cut from the European Central Bank is effectively off the table. On Polymarket, the perceived odds of a rate increase plunged from 34% to 6.7% after the data, with bettors now seeing a 93% chance the Fed will leave rates unchanged this month. The CME's FedWatch tool shows fed funds futures pricing only a 14.4% probability of an increase.
"Crypto's reaction to the latest CPI report shows the market is becoming more selective in how it interprets macro signals," said Markus Levin, co-founder of XYO. "While falling inflation reduces pressure on markets and improves the outlook for risk assets, traders are no longer assuming that every favourable inflation print will automatically lead to rate cuts or new all-time highs."
Oil prices and geopolitics cloud the outlook
Brent crude has risen above $85 a barrel, keeping inflation risks elevated amid geopolitical tensions. Iran has threatened to block Middle East energy exports after the U.S. resumed its blockade of Iranian ports, adding uncertainty to oil and gas flows. Global equity markets were mixed on Wednesday as oil prices climbed. The focus for bitcoin's next move is shifting to whether inflation can continue to cool without rebounding, especially as oil prices rise. More guidance will come from U.S. producer prices due later today and PCE data near the end of the month.
Stripe bids $53 billion for PayPal
Payments giant Stripe, in tandem with private equity firm Advent International, has offered to buy PayPal for more than $53 billion, according to sources. The $60.50-per-share offer would combine two of the largest payment processors, potentially reshaping the digital payments landscape.
UK plans first G7 digital sovereign bond by early 2027
The United Kingdom plans to issue a digital sovereign bond by early 2027, becoming the first of the seven leading industrialized nations to place government debt on a distributed-ledger infrastructure. The move signals growing institutional adoption of blockchain technology for sovereign debt markets.
AI agentic payments standard gains major backing
Every major card network, including Visa, Mastercard, and Ripple, has signed on to the x402 payment standard, designed to enable software-to-software payments without human involvement. The standard brings closer an era of high-volume, low-value payments between AI agents, potentially transforming automated commerce.
Hyperliquid's HYPE shows bearish divergence
The price of Hyperliquid's HYPE token relative to bitcoin has shown a bearish divergence in RSI, indicating further relative downside. However, the debut of perpetual futures on pre-IPO shares of CXMT (ChangXin Memory Technologies) on Trade.xyz may change the dynamic, as trading volume directly benefits HYPE. CXMT, China's largest DRAM memory chip maker, is set for an $8.6 billion IPO in Shanghai later this month.