Hot US CPI Wipes Out $200 Million in Crypto Bets

Source Beincrypto

A hotter-than-expected US Consumer Price Index (CPI) report wiped out about $200 million in leveraged crypto bets within five minutes on Tuesday. Consumer prices rose 0.4% in October, above the 0.23% Wall Street expected, the Bureau of Labor Statistics (BLS) said, and Bitcoin (BTC) and gold both fell.

Traders had already priced in 84% odds of a December Federal Reserve (Fed) rate hike before the data, BeInCrypto reported earlier Tuesday. Core inflation, which strips out food and energy, then held at 0.3% for a third straight month, putting holders of bonds, stocks, gold, and Bitcoin on the hook for higher borrowing costs.

How Did Bitcoin and Gold React to the CPI Report?

Bitcoin swung between $74,770 and $73,525 on Binance in the five minutes after the 8:30 a.m. ET release. It closed that window near $73,709, down 0.9%, and traded around $73,918 by 8:36 a.m. ET.

The wipeout hit long positions, which are bets that prices would rise made with borrowed money. About $200 million of them were liquidated in the five minutes after the release, meaning exchanges forcibly closed them as losses mounted.

Spot gold dropped 0.6% to about $4,048 an ounce over the same window, after touching $4,040, per OANDA data. It held near that level by 8:36 a.m. ET.

Bitcoin and gold 5-minute price charts around the October CPI release, Source: TradingViewBitcoin and gold 5-minute price charts around the October CPI release, Source: TradingView

The link runs through the Fed. The Fed raises rates to cool prices, and higher rates lift the return on cash and Treasury bonds, which compete with assets that pay no interest, such as gold and Bitcoin.

BeInCrypto flagged that risk on Monday, reporting that hotter inflation could firm bets on a December move in its week-ahead inflation preview. Bitcoin exchange-traded funds (ETFs) also shed $1.28 billion as December Fed hike odds climbed.

The Fed held its benchmark rate at 3.75% to 4% in October, when Fed Chair Kevin Warsh linked tighter financial conditions to AI-driven demand.

Where Did Prices Rise Fastest in October?

Food prices rose 0.5% after holding flat in September, with groceries up 0.4% and restaurant meals up 0.5%.

Energy costs climbed 0.7%, and gasoline rose 1.0% after seasonal adjustment. Gasoline stood 37.4% above a year earlier, one of the few annual figures the BLS could publish.

Housing costs, the biggest item in the index, rose 0.3% after 0.4% in September. Core prices had risen 0.2% in July and were flat in June.

Every bank in the pre-release survey called it too low. Headline forecasts ranged from Morgan Stanley’s 0.19% to Wells Fargo’s 0.28%, while core calls ran from Goldman Sachs’ 0.16% to Jefferies’ 0.24%.

Why Is There No Annual Inflation Rate?

The BLS did not publish a yearly inflation rate. It never collected October 2025 prices during the 2025 government shutdown, so there is no base to compare against.

That leaves the monthly figures carrying the full weight of the report. Economists had expected annual rates of 3.9% for headline prices and 2.8% for core, but neither can be confirmed.

What Could Make the Hot Reading Misleading?

Several figures point the other way. Energy price growth slowed sharply from September’s 5.2%, and before seasonal adjustment, gasoline prices fell 0.7% in October.

Bitcoin was also sliding before the data landed. It traded near $75,000 earlier on Tuesday, per TradingView data, and had dropped 1.85% in the 24 hours to Monday morning, according to BeInCrypto Markets.

What Comes Next for Fed Hike Bets?

Bond investors face a second test the same day. The 10-year auction, part of a $125 billion Treasury sale, now prices against hotter inflation.

Producer prices follow on Friday. Economists estimate the Fed’s preferred gauge, core personal consumption expenditures (PCE), at 0.23% for October.

Without an annual figure, the run of 0.3% core readings is the main inflation trend the Fed has in hand before its December decision.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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