Bitcoin Surges Past $114,000 as Crypto Market Cap Rises Ahead of Key Inflation Report
Bitcoin rose past $114,000 on Thursday, lifting the overall crypto market cap by 2% as traders positioned themselves ahead of a key US inflation report. The Bureau of Labor Statistics is set to release August Consumer Price Index data on Sept. 11 at 8.30am Eastern Time, which carries significant importance for digital assets. Investors are eagerly awaiting the numbers to determine whether the Federal Reserve will cut rates at its Sept. 16-17 meeting.
Economists polled by FactSet expect consumer prices to rise 0.3% month over month and 2.9% year over year in August. Core inflation, which strips out food and energy, is seen at 3.1% on an annual basis. A softer-than-expected reading would add pressure on the Fed to cut rates by as much as half a percentage point, potentially weakening the dollar and funneling capital into risk assets like cryptocurrencies and equities.
Bitcoin Spot ETFs Post $757M In Net Inflows as Crypto Markets React
Crypto markets reacted early to the anticipated inflation report, with Ethereum rising 2% to $4,401 and altcoins such as Solana, BNB, and Hype outperforming. BNB and Hype even touched record highs. Spot exchange-traded funds also saw strong inflows, with Bitcoin spot ETFs recording net inflows of $757m on Sept. 10, marking the third straight day of positive flows. Ethereum ETFs pulled in $172m, with BlackRock’s ETHA drawing $74.5m alone.
On September 10, Bitcoin spot ETFs recorded total net inflows of $757 million, marking the third consecutive day of net inflows. Ethereum spot ETFs saw total net inflows of $172 million yesterday, with BlackRock’s ETHA leading at $74.5 million.
Rate Cut Hopes Rise Despite Cautious Fed Officials
Market participants say momentum has been building since July’s inflation report, which suggested easing price pressures. A rate cut would extend that trend, although Fed officials remain cautious. Minutes from the last policy meeting noted concerns over slowing job growth and tariff-driven inflation, while also warning that asset prices were already elevated. Federal Reserve chair Jerome Powell acknowledged at Jackson Hole that conditions “might justify” easing, further fueling rate cut hopes.
Producer Prices Drop, Raising Hopes of Cooling Inflation
Producer price data released earlier showed a surprise drop in August, driven by lower service costs. This further boosted expectations that inflation is cooling, which could have a positive impact on the crypto market. The outcome will matter beyond Bitcoin, as Ethereum and other Layer-1 networks have been sensitive to shifts in US monetary policy. A dovish Fed would likely extend the rally across the board, although a stronger-than-expected CPI print could delay or reduce the scope of cuts, tempering the recent crypto rally.
For now, the crypto market is trading as if relief is coming, with investors betting that a Fed pivot could sustain record-breaking valuations in the months ahead. As the market awaits the upcoming CPI print, one thing is certain – the crypto market will be closely watching the inflation report and its potential impact on the Federal Reserve’s decision.
Read the original article at Cryptonews for more information on the crypto market and its reaction to the upcoming inflation report.
