US Data Keeps Rate-Hike Bets Intact as Bitcoin Shrugs Off Macro News

A new report by the Bureau of Economic Analysis showed the US economy grew at an annual rate of 1.5% in the second quarter, down from 2.1% in the first quarter. Growth slowed as government spending fell and investment and exports grew more slowly. 

A separate report showed inflation eased in June, with the Personal Consumption Expenditures (PCE) price index – the Federal Reserve's preferred measure of inflation – falling 0.1% from May. Meanwhile core PCE, which excludes food and energy, rose 0.1%. Compared with a year earlier, headline PCE increased 3.7% and core PCE rose 3.3% – both of which are still above the Fed's 2% target.

The reports gave investors mixed signals as slower growth could support future rate cuts, but inflation remains above the Fed's target. Experts say this, along with combined with growing institutional participation, leaves markets with little reason to change expectations for the Fed. 

For crypto, the signal is that the macro backdrop stays restrictive for a while longer rather than that it deteriorates, according Can-Luca Köymen, investment strategist at Sygnum Bank. 

Bitcoin (BTC) briefly topped $65,000 as the US markets opening, before retracing to $64,890 as of 17:47UTC, up 1.6% over the previous 24 hours. 

Fed outlook

Annabelle Huang, CEO of blockchain infrastructure firm Altius, told Sandmark the latest data had not changed the outlook for the Fed, with markets still pricing a 60% chance of a quarter-point rate hike in September.

"Q2 GDP and inflation data point to softening growth, while inflation remains above target and hasn't cooled meaningfully," Huang said. "This hasn't shifted the Fed's rate outlook." 

Huang said crypto markets are still facing weak investor demand. While US spot Bitcoin exchange-traded funds (ETFs) posted a modest net inflow of about $32mn on 29 Jul, ending four days of outflows. She said ETF demand has remained weak and most corporate buying has come from Strategy (MSTR).

"Overall, these flows tend to follow or cushion broader macro trends rather than drive price action on their own," Huang said.

Institutional investors reshape crypto

Bitcoin price has been showing shrinking sensitivity to macroeconomic news. Paul Howard, senior director at market maker Wincent, told Sandmark that crypto markets have changed over the past year as institutional investors have taken a bigger role.

"Something observed over the past nine months has been that the fast money in crypto has given precedence to the institutional flows that now sustain the market," Howard said.

He said that has reduced volatility and made Bitcoin less sensitive to economic and geopolitical events. This is in sharp contract to the way Bitcoin reacted in October 2025, for instance, when it plummeted after US President Donald Trump announced tariffs on China. 

"We see much lower volatility – Bitcoin volatility trades around 40, when historically it's been over 60 – and with the introduction of ETFs and derivatives to crypto, prices have become less responsive to macro events," Howard said. "Investors also get exposure to more granular tokenized risk assets that are more directly correlated."

(Corrects 7th paragraph to fix spelling of Annabelle Huang's first name and to change "cut" to "hike" in reference to market's rate change expections.)