Cryptocurrency prices jumped 3-6% on Wednesday after a softer-than-expected inflation report, with Bitcoin reclaiming $64,600 and Ethereum surging 7% to $1,884. The June CPI fell 0.4% month-over-month, the largest drop since April 2020, bringing the annual rate to 3.5% from 4.2% and below the 3.8% forecast. Core CPI cooled to 2.6%, also below expectations, triggering a squeeze that liquidated roughly $300 million in short positions.
CPI Print Boosts Crypto, but Fed Chair Warsh Tempers Optimism
The inflation data was the last major read before the Federal Reserve's July 28-29 meeting, and it undercut the case for rate hikes that had been capping markets all summer. However, Polymarket odds for a July rate cut fell from 35% to just 6% after Fed Chair Kevin Warsh's testimony to Congress later Wednesday. Warsh, in his first appearance since taking over from Jerome Powell, acknowledged the progress but warned against declaring "mission accomplished," saying the committee has "no tolerance" for elevated inflation. He leaned into the AI narrative, calling business investment the most striking feature of the economy and suggesting that AI is fundamentally disinflationary. Despite the positive CPI, Warsh gave no forward guidance, and the market still prices about an 80% chance of at least one rate hike by year-end, down from 90%.
Hyperliquid, Circle, and Regulatory Developments
Hyperliquid's token HYPE jumped 7% to $68 after the SEC Crypto Task Force met with Hyperliquid's Policy Center on Tuesday to discuss crypto regulation. Meanwhile, JPMorgan warned that Hyperliquid's rise threatens Circle's USDC economics, creating a "prisoner's dilemma" between Circle and Coinbase. Mizuho downgraded Circle to underperform with a $50 price target, citing the Open USD threat from a 140-backer consortium. On a positive note, Circle signed a memorandum of understanding with JCB, Japan's largest card network, to explore stablecoin payments across roughly 40 million merchants. In other regulatory news, several Senate Democrats came out against the CLARITY Act, calling it a "corrupt bill" for failing to bar Trump and his family from profiting off crypto. The CFTC moved to stop Kalshi from canceling trades as ordered by a Michigan court, siding with the prediction-market platform. The US and UK also moved to align rules for tokenized finance, aiming to set shared standards as tokenization scales.
Pump.fun Unlock, Robinhood Chain Rotation, and ETF Flows
Pump.fun completed its first major unlock at the one-year mark, with $86 million in team and investor PUMP tokens hitting the market. Despite the unlock, PUMP rose 15%. On Robinhood Chain, there was a major rotation from memes to protocols, with previous meme leaders like Cashcat (-30%), Juggernaut (-38%), and Hoodrat (-47%) selling off, while new launchpad PONS jumped 13x and new RWA protocol INDEX surged 400%. Bitcoin ETFs saw $181 million in net inflows on Tuesday, while ETH ETFs saw $58 million in inflows. Tom Lee's Bitmine generated $45 million from ETH staking in Q2, according to its latest filing.
Market Movers and Meme Coin Tracker
Major cryptocurrencies were broadly higher: Bitcoin +3% at $64,600, Ethereum +5% at $1,880, Solana +3% at $77, and Hyperliquid +7% at $68. Top movers included PI (+15%), PUMP (+14%), and ZEC (+13%). Oil fell 1% to $80, gold dropped 1% to $4,035, and stock futures were slightly green with the Nasdaq up 0.4%. Meme coin leaders were mostly green: DOGE +2%, SHIB +3%, PEPE +2%, PENGU +7%, TRUMP +2%, BONK -3%. No notable action on Solana. NFT leaders were mostly flat, with Cryptoadz (+22%) and Trolls (+26%) leading top movers. New Robinhood NFT sets jumped, including RDEGEN Hood (+450%) and Post Mortem (+60%).