Bitcoin tops $65,000 as U.S. CPI cools, markets rally

Bitcoin surged past $65,000 on Wednesday, July 15, for the first time in nearly a month, leading a broad rally across cryptocurrency and traditional financial markets after a key U.S. inflation report came in cooler than expected. The rebound was fueled by data showing a sharp slowdown in price increases, which dramatically reduced investor expectations for imminent interest rate hikes from the Federal Reserve.

The Consumer Price Index rose 3.5% over the year through June, a decline from May's 4.2% rate and below market forecasts of 3.8%. The monthly CPI fell 0.4%, its largest drop since April 2020, driven primarily by a steep 5.7% decline in energy prices. Core inflation, which excludes volatile food and energy costs, also moderated to an annual rate of 2.6%, down from 2.9% in May.

The data triggered an immediate and sharp repricing of Fed policy. Market-derived measures showed the implied probability of an interest rate increase at the central bank's July meeting plummeted from over 40% to between 10% and 14%. This shift alleviated a major pressure on non-yielding assets like Bitcoin, as higher interest rates typically make traditional savings and bonds more attractive...