Bitcoin Surges Toward $80K on US Inflation Data but Bond Yields Loom Large

Bitcoin price surged toward $80,000 on Friday following key US inflation data that broadly conformed to expectations.

The Consumer Price Index (CPI) showed a year-on-year increase of 3.4% in August, exceeding forecasts of 3.2%. Core CPI, which excludes volatile food and energy prices, rose by 0.3%, surpassing projections of 0.2%.

As a result, implied probabilities of an interest-rate hike by the Federal Reserve at its September 16 meeting increased to 85% from 60% just one week ago. This has sparked concerns that rising bond yields could weigh on Bitcoin prices.

QCP Capital warned that high bond yields would become a headwind for Bitcoin, as they directly undercut the narrative of Treasury liquidity providing structural support. According to QCP, this 'worst mix' for Bitcoin will persist until buyback operations have injected sufficient liquidity into markets.