U.S. PPI for September Rises 0.3%: Here’s the Potential Impact on Bitcoin

Bitcoin could respond favorably, as the latest U.S. Producer Price Index report for September shows a firmer rise in wholesale inflation. 

The PPI, which tracks how much domestic producers charge for goods and services and often signals future consumer inflation, increased 0.3% from August to September. This matched economists’ forecasts and reversed the 0.1% drop recorded the month before, with Bitcoin (BTC) recovering above $87,000 minutes after the release.

U.S. September PPI Rises 0.3% from August

Notably, energy costs drove most of the monthly gain. Specifically, prices for energy goods jumped 3.5%, accounting for roughly two-thirds of the total increase in the goods category. Food prices also moved higher with a 1.1% rise, and goods excluding food and energy posted a smaller 0.2% gain. 

On a yearly basis, the headline PPI rose 2.7%, the same pace as August and slightly above the 2.6% estimate from a Reuters poll. These figures show that producers faced higher input costs, especially for fuel and certain commodities, which could translate into slightly more expensive travel or heating this winter. 

Despite this, the stable year-over-year reading indicates that wholesale inflation is not accelerating in a way that threatens the broader economy.

Meanwhile, the core PPI, which removes the more volatile food and energy components, presented a calmer picture. Specifically, core prices increased only 0.1% for the month, coming in below the 0.3% that analysts expected. 

Essentially, while the headline number looked firmer, the base of inflation continued to cool. This combination reassured investors that inflation is slowly moving toward the Federal Reserve‘s 2% target without slowing economic activity. 

Potential Impact on Bitcoin

As a result, traders increased their expectations for an interest rate cut at the Fed’s December meeting. The softer core reading helped push those odds higher by easing concerns about overheating, even with volatile energy prices and ongoing tariff effects.

Notably, for Bitcoin and other risk assets, this setup creates a slightly more favorable picture. For context, a clearer path toward a December rate cut supports liquidity and could lift appetite for assets with higher risk. 

Moreover, if inflation stays somewhat sticky while the Fed leans toward easing, Bitcoin could also benefit from renewed interest in its inflation-hedge appeal over the medium and long term.

Meanwhile, the report arrived during a difficult stretch for Bitcoin. Prices have struggled since the sharp market drop on Oct. 10. Bitcoin has fallen 25% since Oct. 13 and has lost 20.68% so far this month. With this decline, it is on track for its weakest monthly close since the 37% plunge in June 2022 during the Terra-related crash. 

Bitcoin now trades around $87,101, battling to reclaim the $90,000 and $100,000 psychological levels. However, the latest PPI report could help with relief efforts. Rising expectations for a December rate cut give Bitcoin a slightly stronger macro environment in the coming weeks, especially when considering the imminent end to QT.