Hot inflation report cools bitcoin price, but not for long

“This reaction is antithetical to BTC’s narrative as an inflation hedge.”

2/12/25 11:46AM

The US Consumer Price Index rose by more than expected in January — 0.5% month on month versus the consensus estimate of 0.3% — signaling that the country is not out of the woods with inflation. Along with the overall stock market, the report brought bitcoin’s price crashing down, with the price dropping to about $94,000 minutes after the report was released, though it has since recovered to $95,500 as of 11:15 a.m ET.

Bitcoin dived after the hot inflation print

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— Joe Weisenthal (@weisenthal.bsky.social) February 12, 2025 at 9:17 AM

Bitcoin’s price drop today is also reviving the age-old debate about whether bitcoin is or is not an inflation hedge.

Historically, CPI reports have actually had little effect on bitcoin’s price. A CoinGecko analysis found that its “price falls or rises regardless of the direction of the inflation rate shift.” The report noted:

“For instance, when the CPI report showed a drop from 8.5% to 8.3% (annualized) between March and April 2022, Bitcoin price dropped -11%. Vice versa, Bitcoin’s price went up 9.68%, following a CPI report showing an inflation decrease from 8.2% to 7.7% (annualized) between September and October 2022.”

The inflation report also signals that the Fed might not cut rates as much or as soon as previously anticipated.

“Not only will this create tremendous psychological damage to investors, but the market will likely have a negative knee-jerk reaction to the increasing risks of higher-for-longer or even higher-from-here, so caution is warranted,” Chris Zaccarelli, CIO of Northlight Asset Management, said.

So what does it mean for bitcoin?

Alan Orwick, cofounder of Quai Network, told Sherwood News that the report, which suggests tighter monetary policy, drove the sell-off. “However, there’s optimism for a rebound if inflation cools or liquidity returns to the market,” he said. “This reaction is antithetical to BTC’s narrative as an inflation hedge.”

Other experts echoed the sentiment, noting that the prospect of US interest rates being cut anytime soon has faded, and bitcoin is almost entirely correlated with risk assets.

Nic Puckrin, financial analyst and founder of Coin Bureau, said that though bitcoin was designed to be a hedge against inflation, its adoption by some of the biggest institutions in the world means it moves with stock markets.

“However, tomorrow, we will likely see bitcoin stabilize as long-term holders take advantage of the dip to buy into what is the best store of long-term value currently available,” Puckrin said.

In contrast, some see this as a harbinger of more downward pressure for bitcoin in the foreseeable future.

Jim Flint, founder of Local Search Group and former CRO of the Texas Blockchain Council, said that for bitcoin to go significantly higher, there are typically two key steps. First, the cutting of Fed rates, which is highly unlikely due to today’s CPI. “Second, quantitative easing, or, better said, money printing,” he said. “This morning’s report pushes each of those two steps even further out.”

Yaël Bizouati-Kennedy is a financial journalist who’s written for Dow Jones, The Financial Times Group, and Business Insider.

Sage D. Young6/16/26

Hyperliquid reclaims all-time high

HYPE, the native token powering perpetuals exchange Hyperliquid and its underlying blockchain, rebounded to reclaim its all-time high previously set at the start of the month.

Treasury firms Hyperliquid Strategies and Hyperion DeFi have also rallied as the token increased double digits in the last 24 hours to trade as high as $76.70, rising past its record price set nearly two weeks ago, according to CoinGecko. In the interim between all-time highs, HYPE pulled back to around $53.

The token has several tailwinds, the first coming from ETF flows. Since their inception in May, HYPE ETFs have yet to record negative weekly outflows, posting a cumulative total net inflow of $171.8 million, per SoSoValue.

The second comes from Hyperliquid spending basically everything it earns in fees to buy HYPE, a mechanism embedded into the protocol’s codebase.

The venue’s buyback funding mechanism is set to add a new source of yield. Validators of the network activated “AQAv2,” which means stablecoin deployers will share about 90% of reserve yield revenue on their supply within the protocol.

Around $6.1 billion of Circle’s USDC resides in Hyperliquid, per DefiLlama. Accrual begins on August 26 and the first payment is made on October 3, the network announced in its Discord channel last week.

A substantial amount of capital is riding on different positions of HYPE. In total, a move down to under $53 would result in the liquidation nearly 1.8 million HYPE worth of leveraged long positions on the on-chain perps venue, or $131.7 million, data from CoinGlass shows. For the upside, a climb above $100 results in the liquidation of more than 3 million worth of leveraged HYPE short positions, or $221.5 million.

HYPE’s rebound to all-time high comes after Michael Selig, chair of the Commodity Futures Trading Commission, defended his agency’s decision to approve regulated perpetuals, or futures contracts without expiration dates, CNBC reported on Monday.

Last month, the CFTC approved bitcoin perpetual futures trading in the US through regulated prediction markets firm Kalshi and an affiliate of centralized exchange Coinbase.

“Perps are highly likely to become lightly regulated and thus approved in the US,” said David Pakman, head of venture investments at CoinFund.

“We expect to see perps for many different types of assets, from commodities to equities,” Pakman told Sherwood News.

Yaël Bizouati-Kennedy

6/16/26

Bitcoin is “caught between flow deterioration and macro relief”

Sage D. Young6/15/26

Crypto market snaps back as sentiment lifts, with altcoins from ethereum to XRP soaring

The market capitalization of the crypto industry has jumped around $83.2 billion in the last 24 hours, with privacy-focused token Zcash and worldcoin, the native cryptocurrency of the network backed by OpenAI CEO Sam Altman, leading market gains, jumping over 22%.

But the last 24 hours have been good across the board:

Ethereum has increased more than 9% to trade above $1,800, amid BitMine Immersion Technologies acquiring $139.2 million worth of ethereum.
XRP and solana have rebounded from multiyear lows, each rising roughly 10%.
HYPE has bounced up 12%.
Dog-based memecoins dogecoin and shiba inu have chased gains of more than 4%.

“Investors have been eager to see some positive signs around the Iranian conflict ending, coupled with hopeful outlooks around the CLARITY act, both breathing some life into assets,” Kairos Research cofounder Ian Unsworth told Sherwood News.

Simon Shockey, a crypto strategist at crypto wallet infrastructure firm Privy, said the upswing stems from several things converging. He pointed to how alt markets broadly were “very oversold” following the bug found in Zcash that shook confidence.

Friday, Zcash founder Zooko Wilcox said Anthropic didn’t find any more serious bugs with the Zcash protocol after Shielded Labs requested the AI firm run a security audit of the network with Mythos.

Shockey added that the pool of willing sellers has dwindled. “Even if structurally, AI is a much more compelling and asymmetric bet in the eyes of allocators, many of these crypto assets have simply run out of marginal sellers despite some shorter-term narrative-driven pumps. The only people left to sell at this point are the teams themselves and VCs.”

“Net-net: oversold conditions plus exhausted seller bases plus a macro backdrop that’s stabilized equals a snapback, especially in names that have real usage or community conviction behind them,” Shockey told Sherwood.

Yaël Bizouati-Kennedy

6/15/26

Bitcoin hits highest level in 2 weeks following news of Iran deal

Bitcoin crossed $66,500 Monday morning as the broad crypto market welcomed the return of a risk-on mood.