An unexpectedly hot US Consumer Price Index (CPI) report wiped out about $200 million in leveraged crypto bets in just five minutes on Tuesday. Consumer prices rose 0.4% in October versus the 0.23% Wall Street expected, and both bitcoin (BTC) and gold took a hit.
Even before the data was released, traders were pricing in an 84% probability of a Fed rate hike in December. Core inflation, excluding food and energy, held at 0.3% for the third month in a row, putting holders of bonds, stocks, gold, and bitcoin face to face with rising borrowing costs.
Bitcoin and gold reaction to the CPI report
Within five minutes of the 8:30 a.m. Eastern Time release, bitcoin on Binance fluctuated between $74,770 and $73,525. By the close of that window it was trading around $73,709, down 0.9%, and by 8:36 a.m. it was around $73,918.
Liquidations hit long positions — bets on price increases made with borrowed funds. About $200 million of them were forcibly closed by exchanges within five minutes of the release as losses piled up.
Spot gold fell 0.6% over the same period to about $4,048 an ounce, touching $4,040. The link here runs through the Fed: the regulator raises rates to cool prices, and higher rates increase the yield on cash and Treasury bonds, which compete with non-yielding assets — gold and bitcoin.
Spot bitcoin ETFs also lost $1.28 billion amid the rising probability of a December rate hike. In October the Fed held its benchmark rate in the 3.75%–4% range.
Where did prices rise fastest in October?
Food prices rose 0.5% after flat dynamics in September: groceries by 0.4%, restaurant meals by 0.5%. Energy added 0.7%, gasoline 1.0% on a seasonally adjusted basis, coming in 37.4% above the level a year earlier. Housing costs, the largest component of the index, rose 0.3% versus 0.4% in September.
Why isn't the annual inflation rate published?
The Bureau of Labor Statistics did not publish the annual inflation figure: October 2025 prices were not collected during the government shutdown, so there is no base for comparison. The monthly data carries the entire weight of the report — economists expected 3.9% annual for the headline index and 2.8% for the core, but it cannot be confirmed.
What's next for Fed rates
Bond investors face a second test the same day — the 10-year note auction as part of a $125 billion Treasury issuance, which is now being assessed against hotter inflation. Producer price data comes out on Friday; economists estimate core PCE — the Fed's preferred gauge — at 0.23% for October. Without the annual figure, the string of core readings at 0.3% remains the main indicator of the inflation trend ahead of the regulator's December decision.
Cryptalist analysis: The market reaction underscores the high sensitivity of crypto assets to macroeconomic data under elevated leverage — the five-minute cascade of $200 million in liquidations demonstrates the fragility of the current position structure. Sticky core inflation at 0.3% strengthens the case for Fed tightening, which keeps pressure on risk assets. Until the December meeting, the key volatility triggers will remain the PCE data and the trajectory of rate-hike probabilities.