Bitcoin Hits $79,000, ETH Surges to $2,600 on Hot Inflation Print: What Is Going On?

Bitcoin (CRYPTO: BTC) surged back to $79,000 Friday, swinging nearly 4% in two hours after August CPI data pushed September rate hike odds to 80% on Polymarket.

Ethereum (CRYPTO: ETH) raced to $2,600, up 7% on the day.

What the CPI Data Showed

Wall St Engine flagged on X that August headline CPI rose 0.4% month over month and 3.4% year over year, both in line with estimates. 

Core CPI, however, came in at 0.3% monthly against a 0.2% estimate, its biggest monthly increase since April and the print that shifted market expectations sharply toward a hike.

As Benzinga reported, Polymarket traders now put the chance of a September 25-basis-point hike at roughly 80%, with over $113 million in volume on the contract. 

CME FedWatch moved even more aggressively, showing hike odds at 91.6% Friday morning, up from 72.4% the prior day and just 59.4% a week ago. 

The repricing happened fast: odds started the week near 50%, jumped to 61% on strong payrolls, climbed to 70% after Thursday’s hot PPI, and crossed 80% on Friday’s core CPI miss.

Why Bitcoin Recovered So Quickly

Bitcoin initially sold off on the hotter core reading before reversing sharply, with analyst Michaël van de Poppe posting on X that the dip swept a key level and the correction is over. “We’re about to see new highs for this one,” he wrote.