US factory costs spike, threatening Bitcoin’s rally above $85,000

According to CryptoSlate, a spike in US factory input costs in September has raised potential financing risks for Bitcoin as it attempts to rally above $85,000. The Institute for Supply Management reported that its manufacturing prices index rose 6.8 points to 77.9, with new orders and employment remaining in expansion.

CryptoSlate noted that this data adds evidence to the ongoing interest rates debate ahead of the upcoming payrolls report. The Federal Open Market Committee previously raised its target range by a quarter percentage point to 3.75% to 4% on September 16. Additionally, New York Fed President John Williams stated that another rate increase might be appropriate later this year if the economy follows his forecast, though he noted no evidence of persistent broader inflation.

Resilient manufacturing activity and rising cost pressures could complicate expectations for lower interest rates. For Bitcoin, potential pressures include more expensive borrowing and higher returns on interest-bearing dollar assets, which could increase the return investors demand to hold the cryptocurrency. However, CryptoSlate pointed out that a historical New York Fed staff study found no systematic Bitcoin response to macroeconomic news, meaning market reactions depend entirely on how investors interpret the combined data.