Softer-Than-Expected US PCE Eases October Rate-Hike Pressure, Giving Bitcoin Breathing Room

A softer-than-expected reading in the Federal Reserve’s preferred inflation gauge could create a more supportive backdrop for risk assets such as Bitcoin.

The Block reported on October 30 that the US personal consumption expenditures price index rose 0.3% in August from the previous month and 3.4% from a year earlier. Core PCE, which excludes volatile food and energy prices, increased 0.2% on the month and 3% from a year earlier.

Brendan Ahern, head of investment strategy at the Arbitrum Foundation, said the 0.2% monthly increase in core PCE was welcome news for the Fed. If September’s consumer price index points in the same direction, pressure for an October rate increase would ease.

Markets are watching whether the softer inflation trend will reduce the risk of additional Fed tightening and lift sentiment toward digital assets. Martin Lee, head of market insights at DWF Labs, said Bitcoin volatility remains near its lowest level of the year and options skew is broadly neutral. Investors did not place large one-way bets ahead of the inflation report.

Still, rising US Treasury yields remain a headwind for crypto markets. Vetle Lunde, an analyst at K33, said the surge in yields is pushing investors away from risk assets. Even after Bitcoin posted its highest weekly close since January, it has continued to move sideways rather than extend gains.

Bitcoin was trading around $83,700 on Binance’s USDT market, up less than 1% from 24 hours earlier. Ether traded at about $2,688, while XRP changed hands at $1.50, down about 2%. Ether is up about 70% in the third quarter, while XRP has gained more than 40%.

Profit-taking has also emerged in the altcoin market. Ilia Kalchev, an analyst at Nexo Dispatch, said some profit-taking pressure is appearing, with the number of altcoin inflow transactions to exchanges over the past seven days reaching its highest level since October 2025.

Ahern said a gentler rate path could also affect flows into tokenized US Treasuries. As reinvestment yields decline after short-term Treasury maturities roll off, some funds could shift in search of higher returns to risk assets, including cryptocurrencies.