Bitcoin moved slightly higher on Thursday, climbing above $82,000 as a strong rally in U.S. Treasury bonds improved investor appetite for riskier assets. The modest recovery came despite unexpectedly high U.S. producer inflation figures, which raised fresh concerns about persistent price pressures.
The world’s largest cryptocurrency gained 0.5% to trade at approximately $82,080.50 as of 21:40 GMT. Meanwhile, falling Treasury yields helped support broader financial markets, including cryptocurrencies.
U.S. Producer Inflation Surges to Multi-Year Highs
The latest U.S. Producer Price Index (PPI) report revealed a sharper-than-expected acceleration in wholesale inflation during September.
According to the Bureau of Labor Statistics, headline producer prices jumped 1.3% month-over-month, marking their strongest monthly increase since March 2022. Economists had anticipated a much smaller 0.3% rise, following August’s 0.5% gain.
On an annual basis, producer inflation accelerated to 6.3%, exceeding forecasts of 5.3% and rising from August’s 5.6%. This represented the highest annual reading since December 2022.
Core PPI, which excludes volatile food and energy costs, also exceeded expectations. The index increased 0.7% monthly and 5% annually, compared with forecasts of 0.3% and 4.4%, respectively.
Both figures were higher than August’s readings of 0.2% and 4.8%.
The stronger wholesale inflation data followed similarly elevated consumer inflation figures released a day earlier. Both reports highlighted the significant contribution of rising energy prices to overall inflation.
Strong U.S. Retail Sales and Labor Market Data Add to Fed Uncertainty
Additional economic indicators suggested that the U.S. economy remained resilient despite elevated inflation.
Retail sales increased 0.8% in September to approximately $745 billion, according to the U.S. Census Bureau. The figure comfortably exceeded expectations for a 0.3% increase, although growth slowed from August’s upwardly revised 1.3%.
Meanwhile, initial unemployment claims reached 199,000 during the week ending October 10, matching economists’ forecasts.
The four-week moving average climbed to 198,500, although it remained close to its lowest level since October 2022.
Taken together, the economic reports pointed to persistent inflation, solid consumer spending and a relatively stable labor market.
These conditions could encourage the Federal Reserve to maintain higher interest rates for longer or potentially adopt a more restrictive monetary policy stance.
Higher borrowing costs generally create challenges for speculative investments, including Bitcoin and other cryptocurrencies, as investors may favor assets offering more predictable returns.
Bitcoin Benefits From Sharp Rally in U.S. Treasury Bonds
Despite the hotter-than-expected inflation figures, Bitcoin managed to hold above the $82,000 level as U.S. government bonds staged a significant recovery.
The benchmark 10-year Treasury yield dropped 12.8 basis points to 5.061%, while the two-year yield declined 4.5 basis points to 4.757%.
Because bond prices move inversely to yields, these declines reflected renewed demand for U.S. government debt.
Treasury bonds had previously suffered considerable selling pressure, pushing yields toward multi-decade highs.
However, investors have increasingly turned toward government bonds amid concerns about the substantial borrowing required to finance artificial intelligence infrastructure projects.
The renewed demand for Treasuries helped reduce market borrowing costs, providing some relief to risk-sensitive assets.
For Bitcoin, the decline in yields offered support despite inflation data that could otherwise strengthen expectations for tighter Federal Reserve policy.
Crypto Prices Today: Ethereum, XRP and Solana Follow Bitcoin Higher
The broader cryptocurrency market also recorded modest gains as several major altcoins followed Bitcoin’s upward movement.
Ethereum (ETH), the second-largest cryptocurrency by market capitalization, advanced 1.7% to approximately $2,461.72.
XRP gained 0.5%, while BNB increased 0.2%. Cardano (ADA) and Solana (SOL) also moved higher, rising 0.8% and 1.2%, respectively.
Performance among meme cryptocurrencies was mixed. Dogecoin (DOGE) declined 0.3%, while the TRUMP token registered a marginal 0.1% increase.
Overall, cryptocurrency prices remained sensitive to changing macroeconomic conditions, particularly U.S. inflation expectations and Treasury yield movements.
With inflation running above expectations but bond yields moving lower, investors are closely assessing whether improving financial conditions can provide additional support for Bitcoin and the wider cryptocurrency market.
