As the latest US core inflation figures come in hotter than expected, the crypto market is watching closely to see how Bitcoin will react. The core PCE, a key inflation measure, rose by 0.2% in May, exceeding the predicted 0.1% increase. This development suggests that inflation might not be cooling down as smoothly as anticipated, potentially delaying any interest rate cuts by the Federal Reserve.
Bitcoin’s Performance Amid Inflation
Despite the unexpected inflation rise, Bitcoin has held steady, briefly dipping before recovering to hover around $106,951. This resilience indicates that investors remain confident in Bitcoin’s long-term potential, both as a hedge against inflation and as a store of value. However, Bitcoin’s role as an inflation hedge is not uniform; it sometimes responds positively to inflation data, especially when market expectations align with the economic indicators .
Institutional Interest and Market Dynamics
Institutional investors continue to show interest in Bitcoin, with significant holdings and new investment products like BlackRock’s spot Bitcoin ETF gaining traction. Meanwhile, gold has outperformed Bitcoin as an inflation hedge in 2025, driven by geopolitical tensions and economic uncertainties .
Impact of Monetary Policy
The Federal Reserve’s cautious stance on interest rates, influenced by sticky inflation and potential tariff impacts, means rate cuts are unlikely soon. This environment could affect risk assets, but Bitcoin’s strong performance suggests it remains a viable option for investors seeking both high returns and a hedge against economic uncertainties .
