FameEX Hot Topics | Inflation Relief Unlocks Major Institutional Investment Return to Cryptocurrencies

Cryptocurrency markets have staged a significant rebound following last week’s volatility, which was largely driven by anxieties surrounding U.S. consumer price index (CPI) data. The latest inflation figures, while highlighting some tariff-related pressures, contained no major surprises, effectively granting risk assets like digital currencies the confidence to resume their upward trajectory. This renewed stability has been notably underpinned by a substantial return of institutional capital flowing into spot Bitcoin and Ethereum ETFs, providing a solid foundation for a broader market rally and shifting focus toward altcoins.

A key driver of this recovery has been a surge in institutional participation. Bitcoin spot ETFs notably recorded five consecutive days of inflows, marking their strongest performance in weeks. Ethereum followed suit, registering its largest single-day inflow in two weeks this past Friday. This resurgence in demand is particularly noteworthy given that it occurred despite the U.S. Securities and Exchange Commission (SEC) delaying its decision on staked Ether ETFs earlier in the same week, suggesting a strong underlying bullish conviction among major investors.

Amid this renewed institutional interest, altcoins are decisively stealing the spotlight as optimism builds around the eventual approval of a wider range of crypto-based financial products. With a known digital assets advocate, Paul Atkins, now advising the SEC’s leadership, many market observers believe further ETF approvals are a matter of “when,” not “if.” This sentiment has propelled the Altcoin Season Index to a notable 72, while the total altcoin market capitalization soared to $1.73 trillion, both reaching 90-day highs. Analysts suggest that a significant push in Bitcoin toward $120,000 could historically trigger major capital rotations, further accelerating the move into these higher-beta tokens.

Despite the positive momentum, the market recovery remains measured. Bitcoin’s climb from its September lows near $107,000 has been steady but cautious. While the Federal Reserve’s path toward interest rate cuts this year still appears intact, lingering concerns over persistent inflation and sluggish job growth could complicate the broader risk-on backdrop. Consequently, until markets receive clearer macroeconomic signals, the crypto sector may experience a period of consolidation before embarking on its next major leg higher.

Disclaimer: The information provided in this section is for reference only and does not represent any investment advice or the official views of FameEX.