Bitcoin struggles above $65,000 as sticky inflation offsets US GDP slowdown
Bitcoin briefly surpassed $65,000 following a weaker-than-expected US second-quarter GDP growth rate of 1.5%. However, price gains quickly stalled as strong consumer spending at 3.2% and core inflation at 3.4% reduced expectations for near-term Federal Reserve rate cuts. Higher Treasury yields relative to Bitcoin futures basis continue to dampen institutional demand, leaving the crypto market vulnerable to selling pressure as macro capital favors risk-free returns on safe government debt instruments.
Key takeaways
- 1US second-quarter GDP growth slowed to 1.5%, missing the 2.1% forecast despite household spending surging 3.2%.
- 2Core personal consumption expenditures inflation reached 3.4%, remaining well above the Federal Reserve target of 2%.
- 3Three-month Bitcoin futures basis rates have trailed two-year Treasury yields continuously since February.
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Why it matters
Persistent inflation limits expectations for central bank rate cuts, making risk-free yield assets more attractive than volatile crypto. Institutional investors will likely hold off on aggressive buying until macro monetary policy shifts clearer toward monetary easing.
Discussion
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