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Bitcoin at $200K by Year-End Is Now Firmly in Play, Analyst Says After Muted U.S. Inflation Data

What to know:

  • Softer-than-expected U.S. inflation has likely set the stage for accelerated gains in BTC, potentially to $200,000 by year-end, according to a strategist at 21Shares.
  • The consumer price index rose 0.1% last month, below economists' expectations, which could prompt the Federal Reserve to ease policy.
  • Bitcoin's price was $108,440 at press time, with traders anticipating multiple rate cuts by the Fed this year.

Wednesday's softer-than-expected U.S. inflation has likely set the stage for accelerated gains in bitcoin , potentially to $200,000 by the end of the year, according to Matt Mena, crypto research strategist at 21Shares.

"If BTC breaks out of the $105K-$110K range with conviction, we could see a sharp move to $120K and, more importantly, reach our year-end price target of $138.5K by the end of the summer," Mena told CoinDesk in an email.

"Today’s CPI print may serve as a bullish catalyst for Bitcoin - and it may be the unlock that brings this target forward by several months. If momentum continues building, a $200K Bitcoin by year-end is now firmly in play," Mena added.

21Shares is one of the world's first and largest issuers of crypto exchange-traded products (ETPs),

The report from the Labor Department released Wednesday showed that the cost of living, measured by the consumer price index (CPI) rose 0.1% last month after increasing 0.2% in April. Economists surveyed by Reuters had forecast a 0.2% increase.

Notably, the CPI for durable goods, most of which are imported or manufactured with imported content, decreased by a seasonally adjusted 0.1% month-to-month (-1.3% annualized), indicating that President Donald Trump's tariffs have not yet been fully passed through to the final consumer.

The annualized CPI advanced 2.4%, with core inflation matching the pace of April at 2.8%.

"This continued trend of cooling inflation strengthens the case for potential policy easing later this year. With the Fed’s June meeting approaching, the focus now shifts to how soon policymakers may respond to cooling inflation and shifting macro clarity," Mena said in an email to CoinDesk.

The CPI report prompted traders to price in 47 basis points of Fed easing, equivalent to roughly two 25 basis point rate cuts, this year, compared to 42 basis points early this week. Further, traders priced fully priced the rate cut for October, with the September probability hovering above 70%.

Mena explained that the CPI tailwind comes on the heels of several bullish catalysts, such as sovereign and institutional adoption and the impending stablecoin regulation.

"As macro clarity improves, we should see Bitcoin flows accelerate - driven by renewed institutional confidence, increased activity from Bitcoin treasuries, and the continued rollout of state-level Strategic Bitcoin Reserve (SBR) programs. These dynamics could supercharge ETF inflows and reinforce Bitcoin’s evolving role in global portfolios. Bitcoin is built for this environment," Mena noted.

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