An analysis of Wednesday’s U.S. CPI report indicates that underlying inflation pressures may still be relatively firm despite the softer headline figure.
September Rate-Hike Expectations Slide After PPI
The prospect of a Federal Reserve rate increase in September has weakened sharply following Wednesday’s softer CPI reading and Thursday’s weaker-than-expected producer inflation data.
CME FedWatch data, based on positioning in short-term interest-rate futures, now shows just a 32% probability of a September rate hike. That compares with odds above 75% recorded a month ago.
However, traders continue to see a substantial chance of tighter monetary policy later in 2026. The probability of at least one rate increase before year-end remains close to 70%.
Sharplink Plans $200M ETH Staking Allocation
Ethereum-focused treasury firm Sharplink (SBET) intends to deploy $200 million worth of ETH through Lido as it seeks to increase the yield generated by its cryptocurrency reserves.
The company will receive wstETH, a liquid staking token representing ETH deposited with Lido along with the associated staking rewards. Anchorage Digital will provide custody for the assets.
The arrangement allows Sharplink to generate staking returns while maintaining a token that can be utilized across DeFi platforms, including for collateral purposes. The allocation adds to the company’s existing staking and restaking strategy.
CEO Joseph Chalom said the move is designed to make Sharplink’s ETH holdings more productive. Lido estimates that around $16.5 billion worth of ETH is staked through its protocol, while approximately $10 billion in wstETH is currently being used as collateral.
U.S. Producer Inflation Comes in Below Estimates
The U.S. Producer Price Index was unchanged in July, missing economists’ forecast for a 0.2% monthly increase. The result came after a 0.1% decline in June.
Annual PPI growth slowed to 4.7%, below the 4.9% estimate and down from 5.5% in June.
Core PPI, which excludes food and energy, increased 0.2% during the month. Economists had expected a 0.3% gain, while June recorded a 0.4% increase.
Core producer prices rose 4.2% from a year earlier, matching expectations but slowing from June’s 4.7% reading.
Meanwhile, initial jobless claims increased to 209,000 from 200,000 the previous week. The figure was also above the 202,000 economists had projected.
Bitcoin remained relatively stable around $63,500 following the release.
Trader Places $1.07M Bitcoin Options Bet
A major trader has taken a bullish position on Bitcoin, betting that BTC will climb above $65,500 before the weekend.
Laevitas data shows the trader spent about $1.07 million on call options tied to 4,054 BTC, with a strike price of $65,500 and an August 15 expiration.
Bitcoin was trading between roughly $63,500 and $63,800 at the time, meaning BTC would need to rise by around $1,700-$2,000 within two days for the options to become profitable at expiration.
The transaction signals strong near-term confidence that Bitcoin could break higher in the coming sessions.
PPI Takes Center Stage for Markets
July producer inflation became an important market catalyst after Wednesday’s CPI figures broadly matched expectations. The release also followed last week’s softer U.S. employment report.
Together, the recent economic indicators have increased expectations that the Federal Reserve could keep rates unchanged. The probability of a policy pause had risen to approximately 63%, making the PPI report an important input for investors assessing the Fed’s next move.
Bullish Set to Announce Second-Quarter Earnings
Bullish (BLSH), CoinDesk’s parent company, is scheduled to publish its second-quarter results later Thursday.
Analysts expect revenue of approximately $88.44 million and earnings per share of $1.13. The company’s stock has declined 41.35% over the past three months.
Bullish completed its IPO one year ago, but the shares remain roughly 80% below their all-time high. The stock ended Wednesday at $24.63 and was around 1% higher in premarket trading.
Smaller Tokens Gain as Major Coins Remain Flat
While BTC, ETH, SOL and XRP continue to trade with limited direction, several smaller tokens have posted stronger gains.
OKB, MNT and VVV have each risen by more than 6% over the past 24 hours, putting them among the strongest performers in the top 100 crypto assets by market capitalization.
The gains do not appear to reflect a major rotation out of larger cryptocurrencies. Bitcoin’s market dominance remains near 59%, broadly unchanged since July.
Bitcoin dominance measures BTC’s percentage of the total crypto market capitalization.
Bitcoin Remains Choppy Despite Softer Inflation Data
Macroeconomic writer Mike “Mish” Shedlock argues that the underlying U.S. inflation environment remains stronger than the July CPI headline suggests.
Although CPI growth slowed last month, the decline was partly supported by lower energy and gasoline prices. Shedlock said temporary moves in these categories can make headline inflation appear weaker than underlying price pressures.
He also raised concerns about how certain food and housing costs are captured in official inflation calculations, including property taxes, insurance and home prices.
This may explain why the softer CPI reading failed to trigger a major decline in the U.S. Dollar Index and provided only limited support for Bitcoin.
BTC continues to trade unevenly below the $64,000 mark.
