Bitcoin Stymied by Strong Spending and Persistent Inflation

Bitcoin's attempt to capitalize on the weaker-than-expected US economic growth has been met with skepticism, as strong consumer spending and persistent inflation reduce the likelihood of rate cuts or easier liquidity conditions.

Data released on Thursday showed the US economy expanded at a 1.5% annualized rate in the second quarter, below both the first quarter's 2.1% pace and analysts' forecast of 2.1% growth.

Despite the GDP miss, household spending accelerated at a 3.2% annualized rate during the quarter, while business investment in equipment remained robust, with companies continuing to spend on technology and infrastructure linked to artificial intelligence development.

RSM US principal and chief economist Joseph Brusuelas noted that once you look beneath the headline growth, the economy's underlying momentum appears firmer, with inflationary pressures intensifying disagreements within the Federal Reserve.