Bitcoin marginally higher after reaching three-month highs

Bitcoin was last up 0.2% to $78,739.7, after blazing past $80,000 in the previous session

Bitcoin was marginally higher on Wednesday, taking a breather after hitting three-month highs as caution kicked in after latest data showed that the U.S. central bank’s preferred inflation gauge held steady in July, complicating the outlook for interest rates ahead of the central bank’s September meeting.

Bitcoin was last up 0.2% to $78,739.7 by 21:27 GMT, after blazing past $80,000 in the previous session.

Optimism over the U.S.-Iran standoff helped Bitcoin, after a Russian media report said the two had reached a ceasefire deal to be announced in the coming days. Oil prices dropped on the report, with a resumption in Iran-Oman talks over Hormuz also aiding risk.

Bitcoin’s latest rally was fuelled in large part by the so-called “debasement trade” – wherein markets bet that measures by the U.S. Treasury to calm a spike in bond yields would weigh on the dollar.

This notion sparked flows into speculative, alternative assets like Bitcoin and gold.

Meanwhile, the central bank’s preferred inflation gauge held steady in July, underscoring persistent price pressures as policymakers prepare for their September meeting, data released on Wednesday showed.

Bernstein expects Bitcoin to reach $150,000 by mid-2027 and about $300,000 at the top of its next cycle in 2029, helped by rising fiscal pressures and the “debasement trade.”

The broker said higher government debt and borrowing costs could push policymakers toward policies that weaken currencies over time, increasing demand for scarce assets such as Bitcoin.

Bernstein’s base case assumes Bitcoin continues to follow its historical four-year cycle. It sees the cryptocurrency at nearly $125,000 by the end of 2026, $150,000 by mid-2027 and around $300,000 in 2029.