US debt-to-GDP has pushed past 120%, and Jack Mallers thinks the debate over whether the Fed hikes or cuts is beside the point, both roads lead to inflation. The Strike founder and CEO joins Bitcoin Magazine to explain why he told investors to study Japan, where outright yield curve control and central planning intervention are now required to hold the currency together. He argues the US is heading to the same place and that Bitcoin, as the asset most sensitive to fiat liquidity, is the fastest horse in that environment. Mallers also breaks down Strike’s shift into Bitcoin-backed lending and what it means to build a full Bitcoin financial stack under one roof.
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Bitcoin’s price rose on Friday — despite data revealing that U.S. inflation had risen.
The biggest cryptocurrency by market cap was recently trading for close to $78,749 after jumping 2% over a 24-hour period. At one point on Friday morning in New York, bitcoin rose as high as $79,607.
Bitcoin’s price spike came after news dropped that U.S. consumer prices accelerated in August, reinforcing expectations that the Federal Reserve will raise interest rates next week.
The consumer price index, excluding food and energy, climbed 0.3% in August from a month earlier, which was higher than expected.
Inflation in the U.S. has been difficult to tame due to the war with Iran, which has lifted oil prices, in turn raising the costs of food, gasoline and other goods.
Higher inflation typically means the Federal Reserve will raise interest rates, which in turn could stop bitcoin’s price climbing higher.
According to CME’s FedWatch tool, traders think there is a 85% chance interest rates will be higher by next week. The Federal Reserve will meet next week and reveal what it will do with borrowing costs.
Bitcoin has typically performed well in a low interest rate environment because it means people can buy more of the cryptocurrency with increased liquidity.
Federal Reserve Chairman Kevin Warsh, who took the helm in January, last month gave his first speech as head of the U.S. central bank and said he had “more work to do” to fight inflation.
The U.S. is currently in the grips of an affordability crisis and rising oil prices are a hot topic ahead of the midterm elections.
U.S. President Donald Trump has reassured voters that prices will get under control and repeatedly put pressure on the central bank to lower interest rates.
Bitcoin in August had its biggest run in years following positive regulatory news and an announcement from the U.S. Treasury.
Treasury Secretary Scott Bessent announced the department would double the size of its long-dated bond buybacks, helping non-yielding assets like bitcoin and gold. The cryptocurrency then benefited from President Trump urging lawmakers to get key crypto legislation, the Clarity Act, over the line.
Truflation has forecast that annual U.S. headline inflation will remain at 3.4% in August as higher gasoline prices, tariffs and producer costs threaten to keep price pressure above the Federal Reserve’s target. Truflation said in its August inflation report that…
Solana validators are moving toward a vote on a governance package designed to reduce SOL issuance pressure through resource-based fee burning and faster inflation reduction.
The package includes SGP-0003, combining SIMD-0553 and SIMD-0550. SIMD-0553 introduces a resource-fee burn mechanism, while SIMD-0550 would accelerate Solana’s inflation reduction path toward a 1.5% terminal rate by 2029.
The validator vote is scheduled to open on August 23.
That makes this a proposal story, not a completed supply change.
SOL has not suddenly become deflationary. Supply has not already been materially reduced. But the proposals show that Solana’s community is actively debating token economics as the network matures.
TL;DR
Solana governance is preparing to vote on supply-related proposals.
SIMD-0553 targets resource-fee burns.
SIMD-0550 would accelerate inflation reduction toward a 1.5% terminal rate by 2029.
Why Token Economics Matter
Solana’s performance story is well known.
The network is fast, cheap, and heavily used. But high throughput does not automatically translate into strong token economics. Investors also care about issuance, burns, validator incentives, fee capture, and long-term supply dynamics.
That is why these proposals matter.
If Solana can reduce inflation pressure while keeping validators properly incentivized, SOL’s economic model may look stronger to long-term holders.
The hard part is getting the balance right.
Fee Burning Ties Usage To Supply
A resource-based fee burn can help connect network usage to token economics.
In simple terms, if more network resources are consumed, more fees can be burned under the proposed model. That may create a clearer relationship between activity and supply pressure.
This is important because Solana has often been criticized for high usage but relatively modest fee burn compared with the amount of activity it processes.
A better burn mechanism could improve that narrative.
But design details matter. Fee markets need to protect users, validators, and network stability. Burning too much or too little can create different problems.
Faster Disinflation Is A Bigger Policy Choice
Accelerating inflation reduction is more direct.
SIMD-0550 would move Solana toward its terminal inflation rate faster, aiming for 1.5% by 2029. That may appeal to investors who want lower issuance, but it also affects validator economics and staking incentives.
Networks need validators to remain economically motivated.
If issuance falls too quickly, validator rewards may need to be supported by fees or other incentives. If it falls too slowly, holders may worry about dilution.
This is the central trade-off in proof-of-stake economics.
Vote First, Impact Later
The scheduled vote is the next milestone.
Even if validators support the package, implementation and actual economic effects will take time. Markets often react to proposals before they change fundamentals, but the real impact depends on adoption, deployment, network usage, and fee generation.
That means traders should be careful with immediate supply claims.
The proposals are important because they show Solana governance addressing long-term economics. They do not instantly change circulating supply overnight.
What Comes Next
The validator vote opening on August 23 will show how much support exists for the package.
If the proposals pass, attention will shift to implementation timing and measurable effects on issuance and burn activity. If they fail or are revised, the token-economic debate will continue.
Either way, Solana’s governance conversation is becoming more sophisticated.
The network is no longer only selling speed. It is also trying to refine how usage, fees, inflation, and supply interact.
That is the kind of debate mature chains eventually need to have.
Bitcoin’s price dipped slightly before remaining mostly steady after data on Wednesday showed that U.S. inflation was subdued.
The price of the largest cryptocurrency recently stood at $63,863, mostly unmoved over a 24-hour period. Over the past week, Bitcoin is also flat.
The core consumer price index, which excludes often-volatile food and energy categories, rose 0.2% from a month earlier and increased 2.5% from a year earlier — the slowest pace since March 2021.
Energy and gas prices fell for a second month and grocery prices dropped for the first time since March, according to the print.
The news takes the pressure off Federal Reserve Chairman Kevin Warsh to raise interest rates in September.
Softer inflation data eases the path toward rate cuts, and lower rates reduce the opportunity cost of holding an asset that pays no yield. Bitcoin has typically performed well in a low-interest rate environment.
Sticky inflation in the world’s biggest economy has led the Federal Reserve to take a cautious approach with interest rates. Despite Wednesday’s softer inflation data, prices are still higher than they were a year ago and wages in the U.S. are not keeping up.
Bitcoin has faced increased volatility since the U.S. and Israel attacked Iran in February, with the leading cryptocurrency dropping hard on initial reports of war. Bitcoin is now down nearly 30% year-to-date.
Still, in recent weeks, investors have shown a growing appetite for the asset. Spot Bitcoin exchange-traded funds in the U.S. have experienced massive inflows — the biggest since April last week — despite negative news for the crypto industry: a massive exploit of the popular Coldcard Bitcoin hardware wallets last month shook crypto investors and a vote on the long-awaited digital asset market structure bill, the Clarity Act, has been delayed.
Polymarket traders are pricing in a high probability that the Federal Reserve holds rates steady at its July meeting, with odds rising to 94% after softer inflation data improved the market’s macro mood.
That matters for Bitcoin because rate expectations remain one of the most important forces shaping risk appetite. When inflation cools, traders usually become more confident that the Fed can avoid further tightening. That can support equities, crypto, and other risk assets because the market starts looking ahead to easier liquidity conditions.
Bitcoin has spent much of this cycle trading at the intersection of macro expectations and crypto-native demand. ETF flows, institutional access, and on-chain activity all matter, but inflation and interest-rate expectations still set the tone for how aggressively investors are willing to take risk.
The latest Polymarket move shows how quickly that macro sentiment can shift.
Polymarket odds for a July Fed rate hold climbed to 94%.
The move followed softer US inflation data.
Bitcoin sentiment improved alongside renewed ETF inflows and a better risk backdrop.
Why Fed Odds Matter For Bitcoin
Bitcoin is often described as a hedge against monetary instability, but in practice it also trades like a high-beta liquidity asset.
When traders expect higher rates, the market usually becomes more cautious. Cash yields become more attractive, leverage becomes more expensive, and speculative assets can come under pressure. When traders expect the Fed to pause or eventually cut rates, risk appetite often improves.
That is why prediction-market odds matter.
Polymarket is not the Federal Reserve. It does not decide policy. But it gives a live view of how traders are pricing the probability of different outcomes. A 94% probability of a hold tells the market that traders see further tightening as unlikely in the immediate term.
That can make Bitcoin more attractive, especially if investors believe the worst of the inflation pressure is passing.
The supporting inflation backdrop is important here. The available source material points to July 14 CPI data showing annual inflation falling to 3.5%, down from 4.2% in May. A softer inflation reading gives the Fed more room to stay patient.
ETF Flows Add A Crypto-Native Layer
The macro story becomes more important when it lines up with crypto-specific flows.
The repaired pack notes that spot Bitcoin ETFs recorded net inflows of $132.3 million on July 17, led by BlackRock’s IBIT. If that flow picture holds, it suggests Bitcoin is not only benefiting from a better macro tone but also seeing renewed demand through regulated investment products.
That combination is powerful.
Macro improves the environment. ETF flows show whether investors are actually allocating. Bitcoin tends to respond best when both line up. A better inflation print without follow-through buying can fade quickly. ETF inflows during a hostile macro period can still struggle. Together, they give traders a stronger reason to pay attention.
That said, one day of flows is not enough to declare a new trend. ETF data can be volatile, and Polymarket odds can move as new economic data or Fed commentary arrives. The useful point is that the immediate setup has improved from where it was during the outflow-heavy period.
For Bitcoin bulls, the question is whether this becomes a sustained shift or just a short-term relief move.
The Fed Still Has The Final Word
A 94% prediction-market probability is a strong signal, but the Fed still sets policy based on its own data and mandate.
Officials will be watching inflation, labour-market conditions, financial conditions, and whether price pressure is cooling fast enough to justify a more relaxed stance. A single CPI reading helps, but it does not eliminate the risk of sticky inflation or hawkish guidance.
That is why Bitcoin traders need to treat the Polymarket move as a sentiment signal, not a guarantee.
If the Fed holds and its language is softer, Bitcoin could benefit from a cleaner risk-on setup. If the Fed holds but sounds cautious, the market reaction may be more muted. If future inflation data surprises higher, current odds can unwind quickly.
For now, the market is leaning toward a pause, and Bitcoin is reflecting that improved mood.
The bigger takeaway is that prediction markets are becoming part of the crypto macro toolkit. Traders no longer wait only for Fed statements or analyst notes. They watch live odds, ETF flows, CPI data, and price action together.
That creates a more dynamic market, but also a faster-moving one. Bitcoin can reprice quickly when macro probability shifts. Right now, that shift is working in its favour.
This article is based on Polymarket, BLS inflation data, and Bitcoin ETF flow data.
This article was written by the News Desk and edited by Samuel Rae.
This report is based on information released by Polymarket. at Polymarket
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