Bitcoin Price Spikes, Shrugs off Hot US Inflation Data

Bitcoin price spikes — Bitcoin’s price rose sharply on Friday, climbing past $79,600 and shrugging off hotter-than-expected U.S. inflation data that reinforced expectations for a Federal Reserve interest rate hike.

The consumer price index, excluding food and energy, climbed 0.3% in August from a month earlier, a figure higher than economists had anticipated. The data typically signals a higher likelihood of the Fed raising borrowing costs, a move that can pressure risk assets like Bitcoin.

Despite this, Bitcoin’s price jumped 2% over a 24-hour period, recently trading near $78,749. According to the CME’s FedWatch tool, traders are pricing in an 85% chance of a rate increase following the Fed’s meeting next week.

The report cited geopolitical tensions, including the war with Iran, as a factor lifting oil prices and complicating efforts to tame inflation. Bitcoin has historically performed well in low-rate environments, but recent regulatory developments and Treasury announcements have also been cited as supportive factors for the cryptocurrency’s price.