Bitcoin Surges as June CPI Reveals Inflation Spikes to 2.7% – What’s Next for Crypto?

Inflation’s back on the menu—and Bitcoin’s price action just got spicy. The latest CPI data shows a 2.7% jump in June, and the crypto market isn’t just watching from the sidelines.

Digital Gold Flexes Its Muscles

While traditional investors panic-buy inflation hedges, Bitcoin’s reacting like it’s 2021 all over again. No surprise—when fiat weakens, crypto’s volatility suddenly looks like a feature, not a bug.

Traders vs. The Fed: Round 47

Another rate hike? Another ‘transitory’ narrative? Bitcoin’s chart doesn’t care—it’s too busy absorbing liquidity from anyone still trusting government inflation math. Bonus cynicism: Wall Street’s ‘hedge’ is buying more ETFs while Satoshi’s invention actually solves the problem.

One thing’s clear: When CPI sneezes, crypto catches a bid. Whether that’s smart money or dumb luck? The blockchain doesn’t discriminate.

Inflation Rose To 2.7% in June, US CPI Print Shows

According to the BLS, inflation ROSE at an annual rate of 2.7% in June, in line with economists’ expectations ahead of the data print.

BREAKING: June CPI inflation rises to 2.7%, above expectations of 2.6%.

Core CPI inflation rises to 2.9%, below expectations of 3.0%.

CPI inflation in the US is now up for 2-straight months for the first time since January 2025.

The Fed pause will continue.

Ahead of the CPI print, consensus expected the headline to rise by 0.3% month-over-month (MoM), and accelerate to 2.7% Year-over-Year (YoY)

It marks an extension of the May US CPI inflation reading, which showed consumer prices increased 2.4% annually. Therefore, headline CPI inflation continues to rise for the second consecutive month.  

In the immediate aftermath, Bitcoin recorded a modest surge, rising toward $110,000 as of this writing.

Bitcoin (BTC) Price Performance. Source: BeInCrypto

The modest reaction to the Bitcoin price likely stems from traders and investors already pricing in this impact.

Ahead of the CPI price, markets had started de-risking, with bitcoin sliding from its $123,000 high. The same sentiment was reflected among altcoins, with high-fundamental projects flashing red on Crypto Bubbles.

Probably de-risking ahead of the CPI print. pic.twitter.com/mHn9IDJDZr

Meanwhile, analysts say geopolitical tension between Israel and Iran may have contributed to US inflation in June. This comes amid the perceived impact on oil prices after Iran constrained the Strait of Hormuz.

Experts Blame Trump’s Tariffs and the Israel-Iran War

Economists saw it coming, ascribing the rise of US inflation to Trump’s trade policies. Like Fed chair Jerome Powell, private-sector forecasters anticipated inflation turning higher over the summer, an outlook drawn from businesses passing on Trump’s tariffs to consumers.

“We expect to see over the summer some higher readings,” Powell said during a July 1 conference.

Firms are running out of options after a period of trying to shield customers from tariffs. Previously, some went as far as stocking up on inventories in advance, while others actively absorbed part of the higher costs at the expense of lower margins.

They can do so no longer, with consumers now bearing the brunt.

“You’re still in an environment where businesses used a broad array of strategies to mitigate the effect of duties,” Bloomberg reported, citing EY-Parthenon Chief Economist Gregory Daco.

In hindsight, the minutes of the Fed’s June policy meeting, released last week, accentuate this outlook. As BeInCrypto reported, they showed officials are divided on the potential impact of tariffs on US inflation and, by extension, their course of monetary policy.

Notwithstanding, the next CPI print is always the most important after the last one, and today’s inflation reading is no different.

Before the June CPI print, the CME FedWatch Tool showed interest bettors predicting a 95.3% chance the Fed WOULD keep interest rates unchanged between 4.25% and 4.50% versus a 4.7% chance of cutting rates to the 4.00% to 4.25% range. This has since changed.

CME chart

Fed interest rate cut probabilities. Source: CME FedWatch Tool

The next FOMC meeting is due on July 30, just over two weeks out.