Bitcoin rose near $65,000 on Wednesday, extending a rally fueled by fresh inflation data and dovish signals from the Federal Reserve. The U.S. Producer Price Index (PPI) for June fell 0.3% month-over-month, well below the forecast for a flat reading and May's 0.6% increase. On a year-over-year basis, PPI rose 5.5% against expectations of 6.2% and May's 6%. Core PPI, excluding food and energy, rose just 0.2% in June versus forecasts for 0.4% and May's 0.1%. Core PPI year-over-year rose 4.7% compared to an expected 5.2% and May's 4.6%. The softer numbers reinforced optimism that the Federal Reserve may pause or even reverse its tightening cycle. Bitcoin added to earlier gains, trading at $64,800, up 2.1% over the past 24 hours. Nasdaq 100 futures also rose 0.5%.
The bond market reacted swiftly. The U.S. 10-year Treasury yield fell back to 4.58% from 4.61% ahead of the release, while the 2-year yield dipped to 4.17% from 4.21%. The combination of soft inflation reports from the past two days and dovish comments from New York Fed President John Williams appeared to take any chance of a July rate hike off the table. Additionally, odds of a rate increase by September have dipped to 48% from nearly 70% one week ago, per CME FedWatch. The two-year U.S. Treasury yield slipped further, now down 7 basis points on the day to 4.12%. Bitcoin continued in a tight range on both sides of the $65,000 level.
Fed's Beige Book Offers Hint of More Good News on Inflation
“Compared with the last reporting period, price growth was the same or slower in all Districts,” according to the National Summary of the Federal Reserve’s just-released Beige Book. The economic report, which collects anecdotal information from across the country, painted a picture of moderating price pressures. Combined with the PPI data and Fed Chairman Kevin Warsh’s Congressional testimony, the outlook for interest rates has shifted markedly dovish. Warsh, speaking before the Senate on the second day of his testimony, conceded that AI-related demand could cause price pressures in the coming months. However, he declined to call such one-time changes inflationary, thus suggesting it may not require a Fed policy response such as higher rates. He expects a supply response to the demand pressure, which ultimately would be disinflationary. “This is one of the good family fights,” said Warsh, who suspects not all of his colleagues at the Fed will agree.
Trump Talks Up Data Centers
Former President Donald Trump, in a Truth Social post, praised data centers as “one of the biggest Driving Forces in the Future for Jobs.” He criticized New York Governor Kathy Hochul’s executive action to halt construction of new data centers in that state as a “terrible decision.” Trump argued that data centers are “tremendous WINS for the States and Communities that are lucky enough to get them.” The remarks provided a boost to several former bitcoin miners that have pivoted into data center operations. Hut 8 (HUT) led gains with a 5.2% advance. CleanSpark (CLSK) rose 4%, IREN (IREN) jumped 3%, and TeraWulf (WULF) — which is arguably most exposed to New York’s political situation — added 2.7%. The sector has been under pressure recently due to regulatory uncertainty and volatile energy costs, but political support can often shift sentiment.
Wintermute Cautions Against Chasing Bitcoin's Rally
Market maker Wintermute cautioned that bitcoin’s recent rally above $65,000 faces a key technical hurdle. It noted that $65,000 has repeatedly acted as resistance for bitcoin and profit-taking has already emerged. The firm said investors are now watching Thursday’s PCE inflation report, the end-of-quarter options expiry, and developments in the Iran conflict, warning that one favorable inflation reading does not yet signal a lasting shift in market sentiment. This cautious view contrasts with the broader optimism seen across crypto markets, where ether and XRP have also rallied 2%-3% and are nearing one-month highs.
Space X Falls Below IPO Price for First Time
In a surprising turn, Elon Musk’s Space X (SPCX) fell another 2% on Wednesday, trading at $133.35 — below its $135 IPO price for the first time. In the excitement just after the IPO roughly one month ago, SPCX had traded as high as $225. The decline reflects a broader rotation out of high-growth momentum stocks, as investors rebalance portfolios. Meanwhile, the AI company Anthropic is reportedly moving closer to a public listing. According to Bloomberg, banks leading its planned IPO are arranging meetings with investors in the coming weeks. The Claude chatbot maker is considering going public as soon as October. If it proceeds, Anthropic would join a growing wave of artificial intelligence companies tapping public markets as investor demand for AI-related stocks continues to build.
Billionaire Bitcoin Maxi Ricardo Salinas Backs New BTC-Focused Buyout Firm
Billionaire bitcoin advocate Ricardo Salinas has backed ORANGE JUICE, a newly formed private equity firm focused on bitcoin. The firm has raised $40 million to acquire stable, cash-flow-generating businesses with $1 million to $10 million in annual cash flow across various sectors. According to the press release, cash generated by the businesses will be reinvested into acquisitions or the bitcoin treasury, with conservative use of leverage and capital markets. The founding group includes partners from ego death capital, such as Jeff Booth, Lyn Alden, Nico Lechuga, and Andi Pitt. Salinas, chairman of Grupo Salinas, is an anchor investor. This marks another example of high-net-worth individuals structuring investment vehicles around bitcoin rather than traditional fiat-based returns.
Nasdaq Higher Despite Momentum Stock Plunge
The revenge of the Magnificent Seven (and maybe crypto) continued in early U.S. trading. AI mania momentum names tumbled again, including Micron, SanDisk, Dell, Intel, and Marvell — all down 5%-12%. However, the Nasdaq composite rose 0.3% as many of the Mag 7 names clawed back from recent underperformance. Microsoft, Apple, Google, Meta, and Amazon advanced 2%-4%, while Nvidia and Tesla posted only very modest declines. Crypto continued its rebound after recent massive underperformance, with bitcoin, ether, and XRP all up 2%-3% and nearing one-month highs. The rotation suggests that investor sentiment is shifting away from speculative AI plays toward more diversified value and digital assets.
Michael Burry: $53 Billion Bid for PayPal Too Low
Investor Michael Burry, known for his big short on the housing market, criticized Stripe’s $53 billion acquisition bid for PayPal. “The bid at 1.21X IV15 is simply too low,” wrote Burry, a PayPal shareholder. “IV” means intrinsic value; “IV15” would be the price a minority shareholder might pay based on 15X earnings, with no control premium. Burry believes a buyout price should be roughly $100 per share, rather than the $60.50 per share represented by Stripe’s bid. “With control over the cash flows, those businesses and the personnel, the new owner will have many levers to increase value and make for a better overall business,” he continued. “I am not selling, and I believe it is only an opening bid.” PayPal shares jumped 16.3% to $55.09 on the news. The potential deal would combine two of the largest payments firms expanding into stablecoins and blockchain-based settlement. PayPal’s PYUSD stablecoin has a $2.8 billion market capitalization.
DTCC Goes Live with Tokenization
The Depository Trust & Clearing Corp. (DTCC) announced it is converting a group of shares and Treasurys into digital tokens, as reported by the WSJ. Goldman Sachs, BlackRock, JPMorgan, and Vanguard are among the nearly 40 traditional finance players taking part in the trial run. Among the assets to be tokenized are Microsoft, Circle, Invesco’s QQQ, State Street’s SPDR SPY, and iShares’ 0-3 Month Treasury Bond ETF. This move marks a significant step toward mainstream adoption of blockchain technology in capital markets, potentially lowering settlement times and increasing transparency.
Inflation Has Peaked, Says NY Fed's Williams
New York Fed President John Williams, in a Wednesday morning speech, said: “There are encouraging reasons to expect that inflation has peaked and should edge down in coming quarters.” He projected overall inflation to decline to around 3.25% by year-end, then continue on a glide path toward the Fed’s 2% goal in 2027, landing on target in 2028. Combined with the soft PPI data, Williams’ dovish remarks helped push bitcoin above $65,000 for the first time in several weeks. The market’s interpretation was clear: the Fed is no longer in a hurry to raise rates.
Capital Ekes Back into Crypto on Momentum Trade Wipeout
Halfway through July, the Dow Jones US Thematic Market Neutral Momentum Index (a proxy for AI favorites) is headed for its worst month since December 2023, according to Bloomberg. The rotation has seen speculative capital return to crypto. At cycle lows as July got underway, bitcoin (BTC) is up about 10% so far for the month and ether (ETH) is higher by about 20%. The shift is partly driven by profit-taking in overbought tech names and renewed interest in alternative assets amid a risk-on environment.
Michael Saylor Calls BIP 110 a Harmful Proposal
“BIP 110: Bitcoin Iatrogenic Proposal,” tweeted Strategy Executive Chairman Michael Saylor. For those without a dictionary close by: iatrogenic means harm caused by the treatment itself. The tweet drew ire from BIP 110 proponents like Matthew Kratter and Luke Dashjr. BIP 110 proposes changes to Bitcoin’s consensus rules aimed at increasing privacy and scalability, but critics argue it could introduce vulnerabilities or centralize control. The debate highlights the ongoing governance struggles within the Bitcoin community.
U.S. Discloses Morning Strikes Against Iran
The U.S. Central Command announced precision munitions were launched against coastal defense systems and cruise missile storage and launch sites on Greater Tunb Island. The strikes further degraded Iran’s ability to attack commercial shipping in the Strait of Hormuz. The news did not move markets significantly; Nasdaq 100 futures remained modestly higher, oil was flat, and bitcoin held around $64,500. Geopolitical risks remain a factor for energy prices and risk appetite, but the market appears to have priced in such escalation.
No Reason to Raise Rates, Says Trump's Top Economic Advisor
Kevin Hassett, director of the White House’s National Economic Council, said the latest data shows no justification for Fed rate hikes. He noted a good conversation with Fed Chair Kevin Warsh a few days ago and expressed confidence that Warsh will lead the central bank to the right path on interest rates. Hassett’s comments align with the dovish tone from other officials and the soft inflation data. The remark underscores the political pressure on the Fed to keep monetary policy accommodative.
PayPal Shares Rise Over 21% After Stripe, Advent Make $53 Billion Acquisition Offer
Shares of PayPal surged more than 21% in premarket trading to $57.30 after Reuters reported that Stripe and Advent International offered $60.50 per share, valuing the company at more than $53 billion. The offer represents a 28% premium to PayPal’s Tuesday close and includes roughly $50 billion in committed bank financing. Stripe and Advent would hold equal stakes. The acquisition would combine two of the largest payments firms expanding into stablecoins and blockchain-based settlement. PayPal’s PYUSD stablecoin has a $2.8 billion market capitalization. The deal is seen as a consolidation play in the digital payments space.
Bitcoin and Ether ETFs Both Drew Inflows
U.S. spot bitcoin ETFs took in about $181 million on Tuesday, a day after shedding roughly $425 million, per SoSoValue data. Ether ETFs added about $58 million. BlackRock’s IBIT drove almost all of the bitcoin inflow, pulling in roughly $139 million, with Fidelity’s FBTC adding about $21 million. No bitcoin fund lost money. On the ether side, BlackRock’s ETHA accounted for the entire net figure at about $58 million, with every other fund flat. The swing tracks the price. Bitcoin ETFs rose close to 4% on the day and ether funds about 6%, the strongest single-session move in weeks. Total bitcoin ETF assets climbed back to roughly $78 billion from about $75 billion, and ether ETF assets crossed $10 billion. July’s flows have been choppy rather than directional, with bitcoin ETFs swinging between inflows and outflows nearly every other session this month. The $425 million redemption on July 13 was the largest of the run, while Tuesday’s rebound was the second largest inflow. Neither side has held for more than three days.
In other crypto news, Zcash announced a new node targeting Visa-scale privacy at 50,000 transactions per second. France ordered internet service providers to block Polymarket. Crypto executives said digital native generations may never need a bank account. DOG Mode explained Bitcoin’s next governance fight. Trump targeted Brazil’s payments system while dollar stablecoins quietly overtook parts of that country’s payments. A massive $1.6 billion in crypto liquidity sits idle, and massive bitcoin call spreads target $72,000 by month end when the Fed meets. Tokenization has become a strategic priority for 84% of financial firms. Polymarket traders cut Clarity Act passage odds to a record low as Senate delay drags on. Stripe and Swift race to control the next generation of global payments infrastructure. And research shows that CEX trading volumes rose for the first time in five months in June, with spot climbing 15.3% to $1.11 trillion and RWA perpetual volumes surging to a record $311 billion.
Source:Coindesk News