Bitcoin stable as Fed fave PCE inflation sees first monthly drop in six years
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- Bitcoin traded near $64,500 on Thursday, broadly unchanged from the prior day, shaking off June PCE data that conformed to year-on-year expectations while US equities rallied on easing semiconductor selling pressure.
- June PCE inflation came in at 3.7% year-on-year versus May's 4.1% (the highest in three years), marking the first month-on-month decline since 2020 but still running nearly double the Fed's 2.0% target.
- The Kobeissi Letter flagged the 3.7% figure as the second-highest PCE result since October 2024, while Johns Hopkins economist Steve Hanke called inflation 'the genie the Fed just can't put back in the bottle.'
- Bitwise CIO Matt Hougan forecast that Bitcoin will become less sensitive to future Fed interest-rate changes, noting CME FedWatch expects only a 50bps rise over the next year versus the whole-percentage-point swings of prior cycles.
- Hougan predicted incoming Fed chair Kevin Warsh will echo Alan Greenspan's modest rate-change scale, diverging from predecessor Jerome Powell — a shift Trump publicly encouraged by signaling he expected Warsh to be dovish.
- The Federal Reserve held interest rates unchanged at its Wednesday meeting, with an emerging split among FOMC members on appropriate policy direction.
- The S&P 500 gained 1% and the Nasdaq Composite rose 2.3% as the semiconductor sell-off that battered risk assets earlier in the week eased during US trading.
Why it matters: The first monthly PCE decline since 2020 marks a symbolic shift, yet at 3.7% inflation remains nearly double the Fed's 2% target — and Kobeissi flagged it as the second-highest reading since October 2024. If Hougan is right, Bitcoin's traditional rate-sensitivity link is fading as future Fed moves compress in scale, potentially decoupling BTC from the macro cycle that defined its prior decade.
