Bitcoin surged past $65,500 on Wednesday after the US reported its biggest monthly drop in producer prices in 14 months. The core Producer Price Index, which strips out food and energy, fell 0.3% in June — a sharper decline than economists expected. Bitcoin was trading at $64,943 at the time of reporting, up 2% in 24 hours.
Why the PPI data matters for crypto
Cooling inflation typically boosts Bitcoin because it raises the odds the Federal Reserve will cut interest rates. Lower rates make riskier assets like crypto more attractive relative to bonds and cash. June's Consumer Price Index also showed easing price pressures, reinforcing the narrative. Over the past seven days, Bitcoin has swung from $61,507 to as high as $65,501.
Geopolitical risk still in the picture
The inflation news doesn't erase the latest escalation between the US and Iran. President Trump said the US would take control of the Strait of Hormuz and vowed to intensify bombing until Iran stops attacking ships. Bitcoin has been on a rollercoaster since the US and Israel attacked Iran on February 28. The asset is still down nearly 30% year-to-date and roughly 50% below its all-time high of $126,080 from October.
ETF outflows and a new Fed chair
US investors pulled money out of spot Bitcoin ETFs in June, spooked by inflation uncertainty and a boom in AI-related stocks. That selling pressure may now ease if the data keeps pointing toward rate cuts. But the Fed's top job changed hands in May: Kevin Warsh, a known inflation hawk, was sworn in as chair. He told Congress the Fed has 'no tolerance for persistently elevated inflation.' That stance could limit how quickly the central bank moves to loosen policy, even if inflation cools.
At the time of writing, Bitcoin was hovering near $65,000. The next big test will be whether the rally can hold if the Strait of Hormuz situation escalates further — or if Warsh signals the Fed isn't ready to cut just yet.
