May 15, 2024

Bitcoin made some cautious gains on Wednesday ahead of the latest inflation data from the U.S. BTC is priced at $62,775 at the time of writing, up 1.8% in 24 hours. The wider digital market, as measured by the CoinDesk 20 Index (CD20), also ticked up, adding 0.55%. April's U.S. Consumer Price Index (CPI) inflation data is due at 08:30 ET, with expectations that it will show a 3.4% year-on-year increase, slower than March's 3.5%. Some analysts expect a softer-than-expected CPI reading could lift bitcoin above $65,000.

Bitcoin's mean transaction fee has reversed the post-halving spike, squeezing miners' revenue. Miners earn revenue from two sources: block rewards and transaction fees. Miners receive a fixed amount of BTC as a reward for adding new blocks, along with transaction fees for including transactions in the blocks they mine. The spike, driven by the new Runes protocol, helped to compensate for the block reward being cut in half, but this proved to be short-lived. In response, miners may liquidate around $5 billion worth of BTC in the coming months, according to Markus Thielen, head of 10x Research. "Why would they keep inventory when the price is not going up?" Thielen said.

Broker Canaccord Genuity expects Galaxy Digital's positive momentum to continue after the crypto financial services firm reported an increase in net income of 40% on Tuesday. Galaxy saw an increase in the number of trading counterparties with trading revenue rising 79%, Canaccord noted in a report, citing the approval of spot bitcoin ETFs in the U.S. as the major catalyst. Mike Novogratz’s firm also increased its proprietary mining hashrate and the Helios facility “presents an opportunity for Galaxy to pursue both mining and AI hosting over time,” the broker said. Galaxy's Toronto-listed shares fell 1.12% on Tuesday to close at C$12.41.

Traders are continuing to sell the U.S. dollar against major fiat currencies, supporting gains in risk assets, including cryptocurrencies.

The dollar index, which measures the greenback's exchange rate against a basket of currencies, fell 0.17% to 104.84, signaling a continuation of the decline from the May 1 high of 106.49, according to data source TradingView.

The move followed comments from Fed Chair Jerome Powell that current monetary policy is restrictive by many measures and the next move is unlikely to be an interest-rate hike (or additional liquidity tightening). He also downplayed the hotter-than-expected producer price index figure, which pointed toward more inflation to come.

“I wouldn’t call it hot,” Powell said of the wholesale inflation data. “I would call it sort of mixed.”