CoinShares report says inflation may cap Bitcoin below $80k, while Treasury buyback failure could boost it later
CoinShares report links inflation to Bitcoin price
CoinShares, a European asset manager, released a note on Friday saying that recent inflation data could keep Bitcoin under $80,000 for now. The report also says that if the U.S. Treasury’s bond‑buyback program does not lower long‑term yields, it could become a strong catalyst for Bitcoin later.
Key points
- Core inflation in August rose 0.3% month‑over‑month, above expectations.
- Traders see an 85% chance that the Federal Reserve will keep interest rates higher after its next meeting.
- The Treasury’s expanded bond‑buyback program has not yet reduced long‑term yields.
- James Butterfill, CoinShares’ Head of Research, says a failure of the buyback could lead to a larger “bazooka‑style” intervention.
What the CoinShares note says
The note describes the situation as an “unusual policy mix for Bitcoin.” Higher core inflation makes tighter monetary policy more likely, which can limit Bitcoin’s short‑term upside. At the same time, the apparent inability of the Treasury’s buying program to push down yields may set the stage for a more substantial intervention later, which could act as a medium‑term catalyst for Bitcoin.
What is confirmed
- August core CPI increased by 0.3% month‑over‑month.
- According to CME’s FedWatch tool, there is an 85% probability of higher interest rates after the Fed’s next meeting.
- The Treasury’s bond‑buyback program has not yet materially suppressed long‑term yields.
Uncertainties
It is not yet clear whether the Treasury will expand its buying program to a larger “bazooka‑style” operation. The impact of such a move on Bitcoin’s price remains speculative.
Why it matters
Bitcoin tends to perform well when interest rates are low. Higher rates can make the asset less attractive, while a large Treasury bond‑buyback could lower yields and support Bitcoin as a hedge against a weakening dollar.
