Bitcoin rose on Wednesday, briefly reaching a three-week high, as softer-than-expected US inflation data helped ease concerns about interest rate hikes.
However, continued uncertainty surrounding the conflict between the US and Iran hindered cryptocurrency gains, as both sides launched new attacks and showed no signs of de-escalation.
Bitcoin rose 3% to $64,707.1 by 1:39 PM, briefly reaching an intraday high of $65,340 – its highest since June 22.
Bitcoin Rebounds After Soft CPI Data Cools Rate Hike Expectations
Bitcoin continued its gains from Tuesday, as softer-than-expected US consumer price index data helped ease concerns that a Federal Reserve interest rate hike is imminent. Rate hike concerns have weighed heavily on non-yielding speculative assets like cryptocurrency in recent weeks, given that they increase the opportunity cost of investing in the sector compared to government debt.
However, overall cryptocurrency gains were capped by caution about higher rates over the long term. Federal Reserve Chairman Kevin Warsh, in his first testimony to Congress, reaffirmed the central bank's commitment to its 2% annual inflation target.
Warsh's testimony, coupled with recent hawkish comments from other Fed officials, indicated that the central bank remains hawkish. A resurgence in US inflation—especially amid renewed oil supply disruptions in the Middle East—could reignite rate hike concerns in markets.
The US-Iran standoff continues; Trump said strikes will continue until an agreement is reached.
The US and Iran exchanged blows in the early hours of Wednesday, and the renewed hostilities between the two countries showed no signs of abating. US President Donald Trump said his administration was in contact with Iran on Tuesday, but warned that strikes against the country would continue and could potentially escalate until an agreement was reached.
Iran retaliated against US aggression by launching missiles and drones at several neighboring Persian Gulf countries hosting American bases. Tehran also continued its attacks on commercial vessels in the Strait of Hormuz and warned that it could disrupt other key shipping channels in the region.
These events led to a sharp rise in oil prices, keeping markets on edge over the possibility of renewed inflation driven by rising energy prices.
Cryptocurrency Prices Today: altcoins recover following bitcoin
The broader cryptocurrency market rose on Wednesday, partially recouping recent losses.
However, like Bitcoin, most cryptocurrencies have suffered significant losses this year amid declining institutional and retail interest in the sector. The broader shift toward artificial intelligence stocks also dampened interest in cryptocurrencies.
The world's second-largest cryptocurrency, Ether, rose 4.4% to $1,878.86, while XRP gained 3.4%, reaching $1,1076.
Solana and Cardano rose 2.5% and 3.6%, respectively, while BNB gained 1.3%.
Among memecoins, Dogecoin rose 2%, while $TRUMP gained 2.3%.