Crypto Stocks Rally as Inflation Expectations Soar; Bitcoin Holds Firm Near $104K

Despite rising inflation expectations rattling markets, cryptocurrencies largely traded sideways on Friday, with Bitcoin maintaining its position around $104,000.

Bitcoin (BTC) showed a stable performance, closing near $102,586.74, while crypto-related equities gained significant momentum.

Mining and data center companies like Cipher Mining (CIFR), Hive Digital (HIVE), Hut 8 (HUT), and TeraWulf (WULF) rallied between 10% and 20%, driven by optimism around surging demand for AI infrastructure. This surge followed CoreWeave’s (CRWV) announcement of a $4 billion deal with OpenAI, the maker of ChatGPT, which propelled CoreWeave shares up more than 26%.

Galaxy Digital (GLXY) also attracted attention, jumping 8% in its Nasdaq debut, marking a key milestone as it enters the U.S. market. Previously listed on the Toronto Stock Exchange, Galaxy operates as a crypto investment firm with trading and data center operations.

Meanwhile, Coinbase (COIN) rebounded 9% after tumbling the day before amid concerns about a data breach and regulatory scrutiny from the U.S. Securities and Exchange Commission (SEC).

In other market moves, DeFi Development (DFDV), a real estate tech company with exposure to Solana (SOL), surged 45% to a record high following news of a validator partnership with memecoin BONK and an expanded SOL treasury.

On the broader crypto market, Bitcoin was up 1.3% over the day, staying just above $104,000, while Ether (ETH) climbed 2.3% to $2,580. The CoinDesk 20 Index remained largely unchanged. XRP underperformed after a U.S. judge rejected the settlement proposal between Ripple and the SEC.

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Inflation Expectations Hit Multi-Decade Highs, but Markets Stay Resilient

The University of Michigan’s latest consumer inflation survey revealed one-year inflation expectations jumped to 7.3%, the highest since the 1980s, up from 6.5%. Long-term inflation expectations over 5-10 years also rose to 4.6%, hitting multi-decade highs.

Louis Navellier, CIO of Navellier & Associates, remarked, “These levels are extraordinarily high and hard to rationalize.”

The survey also highlighted sharp political divides, with Republicans anticipating much lower inflation compared to Democrats. Despite the alarming inflation outlook, major U.S. stock indexes closed higher, brushing off concerns for now.

However, higher inflation expectations could influence Federal Reserve policy decisions, potentially delaying interest rate cuts.

“The Fed is closely monitoring consumer expectations. Rising tariff-driven inflation concerns may give the Fed added reason to hold off on easing monetary policy,” Navellier noted.