Inflation Surges Again in June, Bitcoin Slides, Stocks Open Lower

Bitcoin and ether both slid immediately following the release of the report, losing 2.5% and 3.4%, respectively, while the tech-heavy Nasdaq opened 1.6% lower

article-image

blockworks exclusive art by axel rangel

share

key takeaways

  • Annual inflation hit 9.1% in June, surpassing analysts’ expectations yet again
  • Core CPI reached 5.9%, also coming in hotter than expected

Annual inflation rose again in June, surpassing analyst expectations to reach 9.1%, the highest level since 1981, according to the latest Consumer Price Index (CPI) report released Wednesday.

Core CPI, which excludes volatile food and energy prices, hit 5.9% in the 12 months ending in June.

Bitcoin and ether both slid immediately following the release of the report, losing 2.5% and 3.4%, respectively. Equities also opened lower at the start of Wednesday’s trading session. The tech-heavy Nasdaq lost 1.6%, and the S&P 500 kicked off the day 1.4% lower. 

Analysts were unsurprised by the markets’ reaction, as investors move away from risk assets as prices continue to rise.

“You have multi-decade high inflation, low economic growth and [the] end of easy monetary policy,” Fawad Razaqzada, financial markets analyst at investment firm City Index, said. “The big sell-off in equity markets and the weakness in gold means investors have less disposable money to put to work, especially in highly speculative crypto markets.” 

Wednesday’s numbers paint an unfortunate picture for Federal Reserve officials seeking to curb inflation. In June, central bankers opted to raise interest rates 75 basis points, and analysts anticipate an equal or greater hike later this month, putting a definitive end to the pandemic-era strategy. 

The Producer Price Index (PPI) report will be released Thursday, which shows how prices are rising from manufacturers’ perspective. The Fed’s preferred measure of inflation is the core personal consumption expenditures price index, the PCE, which will be released on July 29. 

“As much as CPI matters, there is a school of thought that says PPI provides useful information about the direction of consumer inflation,” Nicholas Colas, co-founder of DataTrek Research, said. “If producer inflation has peaked and is starting to decline, consumer inflation should follow along in the same direction since it is the last stop on the road that starts with raw materials and ends with personal consumption.”

The move out of risk assets is likely to continue, Razaqzada said, and cryptocurrencies are sure to struggle for the foreseeable future. 

“It is no surprise why investors are so bearish on cryptos right now,” Razaqzada said. “The way prices have collapsed makes you wonder whether cryptos will ever experience the same sort of mania we saw post Covid and previously in 2017…troubled crypto lenders, worthless coins, difficulty withdrawing funds and collapsed hedge funds all underscore the risks investors face.”


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Unlocked by Template.png

Research

RTK networks are critical to enabling a world of ubiquitous autonomous drones, vehicles, and industrial robots. We believe the GEOD token enables both a cost and product advantage for the GEODNET RTK network, which will allow it to out-compete multi-billion dollar incumbents Trimble and Hexagon.

article-image

Hunter Horsley says Solana is one of this cycle’s breakout successes that he thinks clients will want to access

article-image

SOL has climbed more than 2,000% in the past two years

article-image

MicroStrategy founder Michael Saylor alluded to Marathon’s CEO during a X Spaces on Tuesday

article-image

Crypto’s calls are equally as juiced as puts, creating a “smile” in the volatility surface

article-image

Turns out that owning the end-user via a crypto wallet is quite a prosperous business

article-image

The announcement followed growing speculation that Gensler would announce his exit before Trump takes office next year