Bitcoin News Today: Bitcoin's Inflation Hedge Narrative Boosts $1B Crypto Inflows

Digital asset investment products attracted nearly $1 billion in inflows last week, driven by growing optimism over potential U.S. Federal Reserve rate cuts and favorable macroeconomic signals. The surge reflects a shift in investor sentiment as markets recalibrate to softer inflation data and anticipation of pivotal central bank decisions, according to BeInCrypto.

The U.S. led the inflow trend, with $843 million flowing into crypto products, while Germany added $502 million in near-record inflows. Switzerland, however, experienced $359 million in outflows, primarily due to asset provider transfers rather than direct selling. These movements underscore evolving regional risk appetites and sensitivity to global monetary policy. CoinShares' Digital Asset Fund Flows Weekly Report noted total ETP trading volumes of $39 billion for the week, significantly above the 2024 average, as Cointelegraph reported.

Bitcoin (BTC) was the primary driver of inflows, drawing $931 million in net capital as investors sought exposure to the leading cryptocurrency, Coinotag reported. This marked a reversal from prior outflows and aligns with broader expectations of Fed easing. In contrast, Ethereum (ETH) recorded $169 million in outflows for the first time in five weeks, though leveraged ETPs remained popular among traders. Altcoins like Solana (SOL) and XRP saw reduced inflows of $29.4 million and $84.3 million, respectively, as markets awaited clarity on upcoming U.S. ETF launches.

The inflow surge followed a surprise drop in U.S. consumer price index (CPI) data, which boosted expectations for a 25-basis-point rate cut at the Fed's next meeting. CoinShares' James Butterfill highlighted that the absence of key macroeconomic data during the U.S. government shutdown left investors "with little guidance," making the CPI report a critical catalyst, a reaction also noted by Coinotag. Markets are now closely watching the Federal Open Market Committee (FOMC) decision and Fed Chair Jerome Powell's press conference for further clues.

Institutional interest in crypto continues to grow, with holdings surpassing $100 billion as of 2024. ProShares recently filed for a diversified crypto ETF tracking the CoinDesk 20 Index, which includes Bitcoin, Ethereum, XRP, and Solana, according to Blockchain Magazine. Analysts suggest that even a modest 0.2% reallocation of global assets into crypto could inject nearly $94 billion into Bitcoin, amplifying market liquidity and potentially pushing its price toward $160,000 by 2025, a projection covered by Coinotag.

Total assets under management in crypto funds now stand at $229 billion, with $48.9 billion in inflows this year. While Bitcoin's recent performance has partially offset earlier losses, year-to-date inflows remain 38% below 2024 levels. The interplay between macroeconomic policy and crypto markets remains pivotal, with lower inflation reinforcing Bitcoin's narrative as an inflation hedge.

As the Fed's policy trajectory crystallizes and ETF approvals loom, the digital asset sector appears poised for further integration into mainstream finance. However, sustained growth will depend on consistent macroeconomic signals and regulatory clarity in the coming months.

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