Cracks in the U.S. economy from its aggressive tariff policies may finally be starting to show after inflation climbed 0.3% in June. Bitcoin tumbled on the news.
Bitcoin Retreats as Inflation Climbs
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Inflation Spikes and Bitcoin Loses Ground
The impact of U.S. President Donald Trump’s tariffs may finally be showing after the U.S Bureau of Labor Statistics (BLS) reported on Tuesday morning that inflation spiked 0.3% at the end of June and now stands at 2.7% annually. Bitcoin fell below $117K on the news after soaring as high as $123K on Monday.
Trump’s trade policies were widely criticized by economists who predicted tariffs would trigger runaway inflation. Instead, inflation came in lower than expected and employment data was consistently positive. Experts were stumped by the economy’s upbeat response to Trump’s global trade war. The president, being increasingly emboldened by the seemingly positive short-term results of his trade strategy, called for Jerome Powell, Chairman of the U.S. Federal Reserve, to cut rates or resign. Powell has been reluctant to cut rates until inflation falls below the Fed’s 2% target.
And now that inflation is back on the rise, some are warning that the 0.3% increase in the consumer price index (CPI) is a lagging indicator of the consequences of Trump’s controversial tariffs. To be fair, today’s CPI numbers didn’t surprise anyone, as they were mostly in line with economists’ predictions, and the president has even chimed in on Truth Social characterizing June’s inflation figures as “very low.”
“Consumer Prices LOW. Bring down the Fed Rate, NOW!!!” Trump wrote. “Fed should cut Rates by 3 Points. Very Low Inflation. One Trillion Dollars a year would be saved!!!”
Overview of Market Metrics
Bitcoin was trading at $116,233.73 as the time of reporting, down 3.35% since yesterday, according to Coinmarketcap. The cryptocurrency has been trading between $115,765.69 and $120,488.41 over the past 24 hours and has appreciated 7.3% since last week.
Trading volume fell by roughly 46% over 24 hours after yesterday’s frenzy and currently stands at $93.04 billion. Bitcoin’s market capitalization also eased 3.3% since yesterday and is now at approximately $2.31 trillion. BTC dominance dropped to 64.05% and is down 0.72% from 24 hours earlier.
Total open interest for BTC futures fell 2.12% today and is currently around $86.03 billion. Bitcoin liquidations fell dramatically after multiple days of heavy losses for short sellers. Total liquidations stood at $36.01 million with short sellers accounting for $6.39 million of that figure while bulls had $29.62 million wiped out on their long positions.
