Bitcoin dipped slightly and then held mostly steady on Wednesday after a softer U.S. inflation reading, with the asset recently trading at $63,863, according to Bitcoin Magazine. The report said the largest cryptocurrency was largely unchanged over the past 24 hours and also flat over the last week.
Core inflation slowed
Bitcoin Magazine reported that the core consumer price index, which excludes food and energy, rose 0.2% from the previous month and 2.5% from a year earlier. That was the slowest annual increase since March 2021.
The same data showed energy and gas prices fell for a second consecutive month, while grocery prices declined for the first time since March.
The publication said the print took pressure off a September rate increase and made the road to rate cuts easier. Lower rates reduce the opportunity cost of holding an asset that does not generate yield, and the report added that Bitcoin has often performed well in a low-rate environment.
The Fed remains cautious
Still, the article said sticky inflation in the world’s largest economy has kept the Federal Reserve cautious on interest rates. Even after Wednesday’s softer reading, prices remain higher than they were a year ago, and wages in the U.S. are not keeping up.
Bitcoin still down nearly 30% this year
Bitcoin Magazine said Bitcoin has seen higher volatility since the U.S. and Israel attacked Iran in February. The report added that the cryptocurrency fell sharply when the first reports of war emerged.
Even after stabilizing, Bitcoin is still down nearly 30% year-to-date, the article said.
ETF inflows arrived despite negative industry news
At the same time, investor appetite has picked up in recent weeks, according to the report. U.S. spot Bitcoin exchange-traded funds saw massive inflows, with last week marking the biggest inflow since April.
That came even as the crypto sector faced negative headlines. Bitcoin Magazine said a major exploit involving the widely used Coldcard Bitcoin hardware wallets last month shook investors, and a vote on the long-awaited digital asset market structure bill, the Clarity Act, was delayed.
The article first appeared in Bitcoin Magazine and was written by Mathew Di Salvo.