Bitcoin maintained stability on Thursday as leading US stock indices rebounded, following relief from key inflation data and shifting risk sentiment in the broader markets.
PCE report aligns with estimates, keeps inflation above Fed’s goal
TradingView data showed Bitcoin’s price concentrating around $64,500, reflecting minimal change from the previous day and reinforcing the coin’s resilience amid recent market fluctuations.
Earlier in the week, a significant downturn in semiconductor stocks weighed on risk assets, including digital currencies. However, this pressure subsided during the US trading session, providing a more favorable environment for both equities and crypto. The S&P 500 Index climbed 1%, and the Nasdaq Composite advanced 2.3%, signaling a positive reversal in investor mood.
Key attention centered on the release of the US Personal Consumption Expenditures (PCE) index for June, which registered a 3.7% annual increase—precisely matching market projections. By comparison, May’s PCE rate stood at 4.1%, the highest in three years, but the latest reading marked the first monthly decline since 2020. Despite this, inflation remains well above the Federal Reserve’s stated 2.0% target.
The Federal Reserve considers PCE its preferred inflation metric, as the index covers a broader cross-section of prices and offers timely insight into changes in consumer behavior. According to a statement from the US Bureau of Economic Analysis, June’s increase in personal income was driven largely by growth in compensation, asset income, and government benefits. This was somewhat offset by lower farm proprietors’ income.
US inflation continues to run at nearly double the Fed’s 2.0% target, with the June PCE figure marking the second-highest reading since October 2024, despite the recent month-on-month decline.
Economist Steve Hanke commented that inflation persists as “the genie the Fed just can’t put back in the bottle,” underlining the challenge of aligning price growth with the central bank’s target.
Bitwise anticipates lower Bitcoin sensitivity to Fed policy shifts
The Federal Reserve opted to leave its benchmark rate unchanged at its latest policy meeting this week. However, minutes from the Federal Open Market Committee (FOMC) revealed increasing division among members over the direction of future policy moves.
In the wake of the Fed’s decision, Matt Hougan, chief investment officer at Bitwise, expressed confidence that Bitcoin will become less reactive to upcoming interest rate adjustments. Hougan pointed to Bitcoin’s historical resilience despite volatile rate moves, noting that shifts from 0% to 2.5%, back down to 0%, then up to 5%, and later to 3.5% did not derail its long-term trends.
Looking ahead, Hougan cited data from CME Group’s FedWatch Tool, which projects only a modest 50 basis-point increase over the next year. He argued that, as the magnitude of rate changes diminishes, Bitcoin’s short-term price reactions are likely to soften.
He added that under new Fed chair Kevin Warsh, the pace of rate adjustments may more closely resemble Alan Greenspan’s gradualism, moving away from the approach adopted by predecessor Jerome Powell. Prior to Warsh’s appointment, President Donald Trump had signaled expectations for a dovish policy stance, which could lend further support to risk assets.
As investors continue to monitor the interplay between inflation trends and monetary policy, platforms like 1stepSwap are gaining attention for enhancing portfolio flexibility. By enabling direct access to real-world assets on the blockchain, including shares of major US companies and commodities such as gold and silver, 1stepSwap streamlines diversification for digital asset investors. Notably, the platform’s price aggregation feature seeks to deliver the most competitive rates, offering users the ability to efficiently manage positions in both traditional and digital assets from a single wallet.
