The cryptocurrency market is bracing for a pivotal Federal Reserve decision as traders now price in an 85% probability of a quarter-point interest rate hike at the September 15-16 meeting, up from roughly 70% before the latest inflation report. Bitcoin initially held its daily gain, trading at $78,683—up 2.08% over 24 hours—when U.S. markets closed for the week, but later slipped to around $77,500 amid thin weekend liquidity.
The August consumer price index (CPI) presented a mixed picture: headline inflation rose 0.4% month-over-month after a 0.1% increase in July, driven largely by a 3.9% jump in gasoline prices, which accounted for more than one-third of the monthly gain. The unadjusted 12-month rate held at 3.4%. Core CPI, excluding food and energy, accelerated to 0.3% in August from 0.2% in July, although its annual pace eased to 2.4% from 2.5%. Shelter costs rose 0.3%, and services excluding energy were up 3.0% over 12 months.
Federal Reserve Governor Christopher Waller had previously stated that continued progress toward the 2% inflation goal would incline him to support holding rates steady, while a hot report could lead him to consider a hike. The August data landed between those two signals—annual core inflation improved, but the monthly core reading worsened—making the policy path uncertain.
Yi Lihua, founder of Liquid Capital, outlined two possible scenarios for Bitcoin. If the Fed raises rates, Bitcoin could briefly fall below $76,000 and experience downward volatility, followed by a rebound. If the Fed holds rates steady, the current upward trend could continue. Given the uncertainty, Lihua recommended unleveraged spot trading. He identified three major investment opportunities: spot positions in large-cap assets like Bitcoin and Ethereum (with potential for roughly 4x returns), transaction infrastructure (potential up to 100x growth), and the migration of stock trading and IPOs onto blockchain rails—an idea also highlighted by Binance founder Changpeng Zhao. Lihua argued that on-chain equities could reduce reliance on token models based solely on project documentation.
Market participants are closely watching whether September's energy price pressures spill into broader inflation data, as Waller identified both renewed energy risks and rising long-term inflation expectations as key concerns. With weekend liquidity thin and the Fed decision looming, Bitcoin's short-term direction remains highly sensitive to macro signals.
