Inflation Fears Dampen Bitcoin's Prospects, But Medium-Term Outlook Improves

Bitcoin's near-term prospects have been dimmed by a stronger-than-expected core inflation print, which suggests the Federal Reserve may adopt tighter monetary policy. According to James Butterfill, CoinShares' Head of Research, this development could cap Bitcoin below $80,000 for now.

The data showed that the consumer price index, excluding food and energy, climbed 0.3% in August from a month earlier, surpassing expectations. This news has increased the probability of tighter monetary policy, which typically works against Bitcoin's performance.

However, Butterfill also noted that the U.S. Treasury's bond buyback programme has so far failed to bring down long-end yields, a development he sees as bullish for Bitcoin in the medium term.