Crypto Stocks Rally Amid Inflation Jitters; Bitcoin Holds Steady Around $104K
Despite soaring inflation expectations, asset prices across markets mostly remained steady, with cryptocurrencies largely consolidating sideways on Friday.
Bitcoin (BTC) hovered near $104,000, finishing the day relatively flat at $102,586.74, while crypto-related stocks stole the spotlight.
Shares of crypto mining and data center companies like Cipher Mining (CIFR), Hive Digital (HIVE), Hut 8 (HUT), and TeraWulf (WULF) jumped between 10% and 20%, fueled by optimism over rising demand for artificial intelligence (AI) computing. This enthusiasm was sparked by CoreWeave’s (CRWV) $4 billion partnership with ChatGPT developer OpenAI, positioning these firms as key players in AI infrastructure.
CoreWeave led the charge with an impressive 26% gain.
The momentum carried over to Galaxy Digital (GLXY), which surged 8% in its Nasdaq debut, marking its first trading day in the U.S. Previously listed solely in Toronto, Galaxy is known for managing crypto investments, trading digital assets, and operating a data center business.
Meanwhile, Coinbase (COIN) rebounded strongly with a 9% rise after a steep drop the previous day due to a customer data breach and ongoing regulatory pressure from the U.S. Securities and Exchange Commission (SEC).
In other crypto news, DeFi Development (DFDV), a real estate tech company with a Solana (SOL) treasury strategy, soared 45% to new highs after announcing a validator partnership with memecoin BONK and adding more SOL tokens to its portfolio.
On the broader crypto front, Bitcoin remained steady just above $104,000, up 1.3% over 24 hours, while Ether (ETH) gained 2.3%, reaching $2,580. The CoinDesk 20 Index stayed flat overall, though XRP underperformed after a U.S. judge rejected the proposed settlement between Ripple and the SEC.
Inflation Expectations Hit Decades-High, Markets React Cautiously
On the macroeconomic side, the University of Michigan’s latest consumer inflation survey revealed expectations for one-year inflation climbed to 7.3%, the highest level since the 1980s, up from 6.5%. Longer-term inflation expectations over 5-10 years also rose to 4.6%, marking a multi-decade peak.
Louis Navellier, chief investment officer at Navellier & Associates, expressed skepticism: “It’s so high it doesn’t make sense.”
Political divisions emerged clearly in the data, with Republicans expecting much lower inflation than Democrats. Despite these elevated expectations, major U.S. stock indices climbed into the late trading hours, largely ignoring the inflation report.
However, the surge in inflation expectations may influence Federal Reserve policy, potentially discouraging rate cuts in the near future.
“The Fed pays close attention to consumer inflation expectations. With concerns about tariff-driven inflation rising, this may give them further reason to pause on cutting rates,” Navellier added.
