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Question #558

In what ways do U.S. CPI data releases affect Bitcoin’s price through changes in Treasury yields?

Category: General
Higher CPI readings often push Treasury yields upward, making Bitcoin less attractive.
Lower CPI numbers guarantee Bitcoin price gains through direct investor arbitrage trades.
CPI updates directly alter Bitcoin mining difficulty by adjusting block reward parameters.
They shift spot ETF regulatory approvals, increasing institutional fund inflows to Bitcoin.

Why is this the correct answer?

When U.S. Consumer Price Index data is higher than expected, investors demand higher yields on Treasuries to offset inflation. Rising Treasury yields make traditional fixed-income investments more competitive relative to risk assets like Bitcoin. As a result, some capital may flow out of Bitcoin into bonds, causing short-term price pressure.

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