By Brian Swint

Bitcoin and other major cryptocurrencies were rising on Wednesday after the latest inflation data raised hopes of a Federal Reserve interest-rate cut next month. Crypto was benefiting from the same momentum that was pushing up stocks after the consumer price index came in slightly weaker than expected on Tuesday. That gave traders confidence that the Fed could lower borrowing costs by a quarter point at its Sept. 17 decision. Lower rates make risky assets such as stocks and digital assets more attractive relative to lower-yielding investments such as bonds.

The record intraday high for Bitcoin of $123,166 was reached in mid-July. It's trading now at $120,420, up 1.4% over the past 24 hours, according to CoinDesk. Ethereum, the second-largest crypto by market value, jumped 6.6% to $4,690. XRP was up 3.4%, Solana gained 14%, and Dogecoin was up 8.9%, according to prices on the Kraken exchange.

The S&P 500 and technology-heavy Nasdaq both hit record highs yesterday after the inflation numbers landed. Cryptos had pulled back before the economic data on concern that if the figures were too hot, the chances of a rate cut would fall.

The main takeaway from the CPI report was that, even though the effects of President Donald Trump's tariffs are starting to show up in data, the impact isn't too great. Headline inflation rates don't seem poised to pick up sharply and, as long as the labor market shows signs of softening, the Fed should still have room to cut rates without risking strong gains in inflation.

Beyond lower rates, there are other reasons why the crypto rally could keep going. The White House is seen as friendly to the industry, and it's expected to ease regulation on digital assets and encourage them to become more mainstream.

That could help crypto-focused companies as well. Shares of Bullish, the company that owns the news and data site CoinDesk, are set to start trading later this week. Strategy, formerly known as MicroStrategy, and GameStop have both made buying Bitcoin a key plank of their business strategy. Coinbase Global and Robinhood Markets, two trading platforms, have also benefited from rising crypto prices.

Write to Brian Swint at brian.swint@barrons.com

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August 13, 2025 10:14 ET (14:14 GMT)

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