Bitcoin Drops as Traders Lift July Fed Rate Hike Bets Ahead of Inflation Report

Bitcoin dropped more than 2% in 24 hours to $62,380 after money markets sharply repriced the odds of a July Fed rate hike — from around 10% just days ago to roughly 50% now. Ether and XRP lost a comparable share of their value over the same window, CoinDesk reported.

What triggered the repricing

The catalyst was remarks from Fed Governor Christopher Waller suggesting officials may need to raise rates to bring price pressures under control. The hawkish tilt in tone is also tied in part to escalating US-Iran tensions and a sharp rise in oil prices.

The 2-year US Treasury yield climbed to 4.29% — its highest level since early last year, reflecting the market's repricing of the rate path.

What's next

Investors are focused on Tuesday's consumer price index (CPI) release at 8:30 a.m. ET and Fed Chair Kevin Warsh's upcoming testimony before Congress — the two events expected to clarify whether the Fed follows through on a rate hike or holds steady instead. Economists are forecasting headline CPI below 4% annually for the first time since January, with core inflation also expected to ease.

We previously covered how Warsh himself swung bitcoin sentiment sharply twice in two weeks with his own remarks — full story here.

What this means in practice

The market is currently pricing a rate hike at roughly a coin-flip — meaning the outcome is genuinely undecided, and both the inflation data and the tone of Warsh's testimony could swing expectations either way. For crypto, that points to elevated volatility right up until the report drops.

This material is for informational purposes only and is not investment advice.