Bitcoin climbed above $63,000 on Tuesday after the U.S. Bureau of Labor Statistics reported an unexpectedly large decline in consumer prices for June. Monthly headline inflation fell 0.4% on a seasonally adjusted basis, the biggest monthly drop since 2020, bringing the annual headline rate down to 3.5% from May’s 4.2%, and undercutting market forecasts.
Energy prices drove much of the softness in the report. A temporary U.S.-Iran ceasefire during June eased pressure on oil and gasoline costs, allowing fuel prices to retreat sharply before hostilities resumed. Core inflation, which excludes volatile food and energy categories, also cooled to 2.6% year-over-year from 2.9% in May, below economists’ expectations.
Markets quickly revised expectations for Federal Reserve policy. Traders had been pricing in roughly a 40% chance of a rate hike in July after recent hawkish comments from Fed officials. That probability fell after the CPI release, though attention shifted to Fed Chair Kevin Warsh’s congressional testimony, which began about 90 minutes after the data, for clues on whether the softer numbers will influence near-term policy decisions.
The CPI surprise gave risk assets a lift after a difficult stretch for cryptocurrencies. Bitcoin had tumbled from its October 2025 high above $126,000 to trade near $62,000 before Tuesday’s data. Spot Bitcoin exchange-traded funds recorded more than $8.2 billion in cumulative outflows over eight consecutive weeks through early July, marking their worst run since launching in 2024.
Renewed tensions in the Middle East had weighed on markets heading into the report. A reinstated naval blockade of Iranian shipping through the Strait of Hormuz was announced on Sunday and contributed to a jump in oil prices. Brent crude had settled more than 9% higher on Monday. Those geopolitical developments briefly pushed Bitcoin below $62,200 on Monday.
After the CPI release, Bitcoin rose from roughly $62,600 to above $63,000, and Ethereum also posted gains. Analysts cautioned the rally could prove fragile. If enforcement of the Strait of Hormuz blockade, scheduled to intensify later in the day, triggers another spike in oil prices, the inflation outlook and risk sentiment could quickly reverse.
For investors, the near-term path for bitcoin and other risk assets will likely depend on two things: whether the Fed signals that policy will remain restrictive despite the softer print, and whether Middle East tensions push energy prices back up. Both factors could reshape rate expectations and market risk appetite in the days ahead.
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