Crypto markets surged following the June Consumer Price Index report, which showed inflation fell 0.4% month over month, the largest monthly decline since April 2020. Bitcoin climbed from around $62,000 to $64,900, while Ethereum jumped 7% to $1,884, as approximately $300 million in short positions were liquidated. The annual inflation rate dropped to 3.5% from May's 4.2%, coming in below the expected 3.8%. Fed Chair Kevin Warsh testified to Congress hours after the CPI release, his first appearance since taking over from Powell, stating that if the Fed gets policy right, the inflation surge of the last five years "will be a thing of the past."
Bitcoin and Ethereum Rally Following June CPI Decline
The June CPI data triggered immediate movement across crypto markets. Bitcoin rose from approximately $62,000 to reclaim $64,900 within minutes of the data release. Ethereum surged 7% to reach $1,884. Core CPI cooled to 2.6%, below forecasts, and was flat on the month. The CPI report marked the last major inflation reading before the Fed's July 28-29 meeting. Following the data release and Warsh's commentary, the odds of a July rate cut fell from 35% to 6% on Polymarket, according to the source. Odds of at least one hike by year-end remained around 80%, down from 90%.
Fed Chair Warsh Testifies to Congress on Inflation Policy
Fed Chair Kevin Warsh appeared before Congress in his first testimony since taking over from Powell. When asked directly about the morning's CPI data, Warsh stated that some might look at it and declare "mission accomplished," then added, "that is not my view." He provided no forward guidance or signal on the next policy move. Warsh told lawmakers the committee has "no tolerance" for elevated inflation. During his testimony, Warsh called business investment the most striking feature of the economy and predicted that what's now called "AI investment" will soon just be called "investment," describing AI as fundamentally disinflationary.
SEC Crypto Task Force Meets with Hyperliquid Policy Center
The SEC Crypto Task Force met with Hyperliquid's Policy Center on Tuesday to discuss crypto regulation and how Hyperliquid fits within the regulatory framework. Separately, several Senate Democrats opposed the CLARITY Act at a press conference, calling it a "corrupt bill" and escalating opposition over its failure to bar Trump and his family from profiting from crypto. The CFTC moved to stop Kalshi from canceling trades as ordered by a Michigan court, siding with the prediction-market platform in a jurisdictional dispute between the federal regulator and the state.
Pump.fun Completes First Token Unlock with $86M Release
Pump.fun completed its first major unlock at the 1-year mark, with $86 million in team and investor PUMP tokens entering the market. The token rose 15% following the unlock. Mizuho downgraded Circle to underperform and cut its price target to $50, citing competition from Open USD. JPMorgan stated that Hyperliquid's rise threatens Circle's USDC economics, creating a "prisoner's dilemma" that pits Circle and Coinbase against each other for distribution. Circle signed a memorandum of understanding with JCB, Japan's largest card network, to explore stablecoin payments across approximately 40 million merchants.
Bitcoin and Ethereum ETF Inflows Continue
The Bitcoin ETFs recorded $181 million in net inflows on Tuesday. The Ethereum ETFs saw $58 million in inflows during the same period. Tom Lee's Bitmine generated $45 million from ETH staking in Q2 according to their latest filing.
FAQ
What did the June CPI report show?
The June CPI fell 0.4% month over month, the biggest monthly decline since April 2020. The annual inflation rate dropped to 3.5% from May's 4.2%, coming in below the expected 3.8%. Core CPI cooled to 2.6%, below forecasts, and was flat on the month.
How did crypto markets react to the CPI data?
Bitcoin jumped from around $62,000 to $64,900 within minutes of the CPI release. Ethereum surged 7% to $1,884. Approximately $300 million in short positions were liquidated as the markets moved higher.
What did Fed Chair Warsh say about the CPI data?
When asked directly about the morning's CPI data, Warsh stated that some might declare "mission accomplished," then added, "that is not my view." He provided no forward guidance on the next policy move and reminded lawmakers the committee has "no tolerance" for elevated inflation.
