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BTC CoinShares: The latest CPI data is not conducive to Bitcoin's short-term performance, but the U.S. Treasury bond market may bring positive benefits in the medium and long term.
CoinShares said that the latest U.S. Consumer Price Index (CPI) data does not support Bitcoin's rise. The company added that the persistence of inflation may limit the short-term upside potential of the cryptocurrency market.
Inflation expectations and monetary policy tightening risks
James Butterfill, director of research at CoinShares, pointed out in an assessment that overall inflation was broadly in line with expectations, but core inflation was still slightly higher than forecast. According to the company's analysis, this situation increases the possibility of the Federal Reserve raising interest rates in September, and also strengthens the risk that monetary policy may remain tight for longer.
CoinShares pointed out that the market had previously regarded weak inflation data as a potential catalyst to push Bitcoin to stand above US$80,000, but the latest CPI data did not meet this expectation. Therefore, Bitcoin's short-term upside may remain limited.
In addition, the company also mentioned that the flow of mutual fund funds also reflects weakening market sentiment. Although approximately US$1.3 billion flowed into digital asset investment products last week, a net outflow of US$243 million has been recorded so far this week. CoinShares believes that a stronger and more sustained rise above $80,000 may require weaker economic data, a shift from the Federal Reserve to a more dovish policy stance, or a new policy catalyst.
Paradox Effect in the U.S. Treasury Market
However, CoinShares notes that one support factor for Bitcoin in the medium term may come from the U.S. Treasury market. The report pointed out that although the U.S. Treasury Department has increased its purchases of long-term bonds, its expanded bond repurchase program has failed to significantly reduce long-term interest rates.
According to the report's analysis, the repurchase program may support market liquidity to a certain extent, but the fact that it cannot reduce borrowing costs highlights the structural pressure facing the U.S. bond market. Concerns about the fiscal outlook, high inflation and high risk-to-maturity premiums continue to limit the effectiveness of the Treasury's current bond purchase measures.
CoinShares believes that this "failure" may have a positive impact on Bitcoin in the long run. The company noted that if long-term bond yields remain high under the current plan, pressure for U.S. Treasury Secretary Scott Bessent to intervene more aggressively may increase. At the same time, rising oil prices may also narrow the options for policymakers.
According to the company's analysis, this situation may increase the possibility of implementing a larger bond purchase program to drive down bond yields. If fiscal policy prospects do not improve simultaneously, such interventions will further strengthen the narrative of "currency devaluation" recently highlighted by Bitcoin and gold.
CoinShares emphasized that large-scale Treasury intervention could be seen as a direct suppression of borrowing costs, raising market concerns about fiscal dominance, debt sustainability and the long-term purchasing power of the dollar.
