Bitcoin Holds Above $81,000 After U.S. Wholesale Prices Jump to Highest Level Since 2022

Bitcoin Flat Despite Hot Inflation Reading

Bitcoin held steady above $81,000 on Thursday morning after the U.S. Labor Department reported the fastest monthly rise in wholesale prices in more than four years. The benchmark cryptocurrency rose less than 0.5% over 24 hours and none of the five largest tokens moved more than 1%.

The calm reaction contrasted sharply with Wednesday, when consumer price data that missed forecasts by a small margin triggered a 2.1% drop in Bitcoin within minutes. Thursday's inflation reading was larger across every measure but barely moved crypto markets.

Key Numbers From the Report

• Producer prices rose 1.3% in September, the largest gain since March 2022, according to the Bureau of Labor Statistics.
• Energy prices drove more than 80% of the increase, with the final demand energy index jumping 10.8%. Gasoline prices surged 20.3%.
• Core producer prices — excluding food, energy and trade services — rose 0.5%, up from 0.3% in August. Over 12 months, core prices climbed 5%, compared with 4.8% the prior month.
• Bitcoin traded at $82,235, up 0.5% on the day and down 0.4% for the week. Ether was at $2,420.59, down 0.8% on the day.
• Total crypto market value stood at $2.77 trillion with Bitcoin dominance at 59.5%.

What the Bureau of Labor Statistics Reported

The Bureau of Labor Statistics released the Producer Price Index data at 8:30 a.m. ET Thursday. The index for final demand rose 1.3% after a 0.5% increase in August. Goods prices led the gain, with final demand goods rising 2.6%. The bureau stated that over 80% of the broad-based rise was attributable to energy, and that roughly half of the goods increase came from gasoline prices alone. Services rose 0.8%, with trade margins contributing nearly half of that rise.

Market Participants React

Jef Anderson, head of U.S. operations at STS Digital, called the producer price figure "a huge number" that would likely hurt risk appetite. He expected "defensive positioning for the next few sessions" as traders digest recent inflation data. However, he noted that bond yields moved counter-intuitively lower after the report, which he described as an encouraging signal.

Options traders had already positioned before the release. Nick Forster, founder of Derive.xyz, reported that hedging activity was doubling, with the odds of Bitcoin dropping below $80,000 by Friday's options expiry rising from 9.5% to 18.4%. He noted that options volume surged 12 times higher in the three hours following the consumer price release on Wednesday, with one trader spending $151,000 on a put spread with approximately $41 million in face value betting Bitcoin would stay below $78,000 by Friday morning.

Fed Rate Hike Odds Tick Up

Traders on Polymarket raised the odds of a Federal Reserve interest rate increase at the Oct. 27-28 meeting to 27.5% from 21% the previous day. The odds of no change stood at 72.5%, while the chance of a rate cut fell below 1%. Fed officials enter a blackout period at midnight on Saturday, Oct. 17, and will not speak publicly until after the Oct. 29 meeting. Fed Chair Kevin Warsh is scheduled to appear at an IMF event in Bangkok on Thursday evening, the last public appearance before the blackout.

ETF Outflows Continue

U.S. spot Bitcoin exchange-traded funds — investment funds that track Bitcoin's price and are traded on stock exchanges — lost $261.4 million on Wednesday, erasing the $175.7 million in inflows from the day before. Fidelity's FBTC accounted for $152.7 million of the outflow and BlackRock's IBIT $110.9 million. Bitwise's BITB was the only fund to see inflows, adding $2.2 million. Spot ether ETFs lost $129.5 million on Wednesday after a single positive session of $24.8 million.

What Is Still Unclear

It remains unclear whether the crypto market's muted reaction to the hot inflation data reflects growing investor resilience or simply a lack of clarity about what the data means for future Fed policy. Bond yields fell even as inflation rose, a pattern traders described as counter-intuitive.

Why This Matters for Crypto Investors

Higher wholesale inflation could prompt the Federal Reserve to keep interest rates elevated or even raise them, which typically weighs on risk assets like cryptocurrencies. The current flat market reaction suggests investors may already be pricing in tighter monetary policy, but traders warned that defensive positioning could increase in the coming sessions as the data is digested.

Sources

• The Defiant
• Bureau of Labor Statistics
• U.S. Treasury
• Federal Reserve Board
• Farside Investors

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