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. The numbers carry outsized importance for digital assets, with investors eyeing 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.
Bitcoin Spot ETFs Post $757M In Net Inflows
A softer-than-expected reading would add pressure on the Fed to cut rates by as much as half a percentage point. Such a move would weaken the dollar, pull money out of bonds and funnel capital into risk assets like cryptocurrencies and equities.
Crypto markets reacted early. Ethereum rose 2% to $4,401, while altcoins including Solana, BNB and Hype outperformed, with BNB and Hype touching record highs.
Spot exchange-traded funds also saw strong inflows. On Sept. 10, Bitcoin spot ETFs recorded net inflows of $757m, marking the third straight day of positive flows. Ethereum ETFs pulled in $172m, with BlackRock’s ETHA drawing $74.5m alone.
Rate Cut Hopes Rise Even As Officials Flag Caution
Market participants say momentum has been building since July’s inflation report, which suggested easing price pressures. A rate cut would extend that trend, though 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, who has resisted repeated calls from President Donald Trump for deeper cuts, acknowledged at Jackson Hole that conditions “might justify” easing.
Traders now see the upcoming CPI print as the final data point before next week’s policy decision.
Producer Prices Drop, Raising Hopes Of Cooling Inflation
Producer price data released earlier showed a surprise drop in August, driven by lower service costs. That further boosted expectations that inflation is cooling.
The outcome will matter beyond Bitcoin. Ethereum and other Layer-1 networks have been sensitive to shifts in US monetary policy, while altcoins often see sharper moves during periods of liquidity rotation. A dovish Fed would likely extend the rally across the board.
At the same time, 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.
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