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Cryptocurrency investment products recorded $921 million in inflows last week, reversing the previous week’s $513 million in outflows as lower-than-expected US inflation data reignited optimism about future Federal Reserve rate cuts.
The surge more than offset the $513 million in crypto ETP outflows from the previous week, signaling renewed market confidence after a period of caution.
Analysts attributed the momentum shift primarily to easing inflation pressures and a growing belief that the Federal Reserve will continue trimming interest rates.
“The ongoing US government shutdown, and the resulting absence of key macroeconomic data, has left investors with little guidance on the direction of US monetary policy,” said James Butterfill, Head of Research at CoinShares. “Last week’s CPI data helped restore anticipation of further rate cuts.”
The Consumer Price Index (CPI) rose by just 0.3% in September, putting annual inflation at 3%, both figures lower than economists had forecast.
This fueled optimism across risk assets, particularly cryptocurrencies, which tend to perform better in a low-rate environment.
Bitcoin (BTC) led the turnaround in digital asset investment flows, attracting $931 million in inflows, almost fully recovering the prior week’s losses.
The reversal represents a significant bounce from recent crypto ETP outflows that had raised concerns about waning institutional interest.
According to CoinShares, Bitcoin has now attracted $9.4 billion in inflows since the Federal Reserve initiated its rate-cutting cycle in September.
Despite the latest surge, year-to-date Bitcoin fund inflows stand at $30.2 billion, still 38% below the $41.6 billion recorded in 2024.
“The renewed inflows suggest that institutional investors remain highly sensitive to macroeconomic cues,” said Elena Torres, a digital asset strategist at Galaxy Research.
“Lower inflation readings typically boost crypto appetite because they ease pressure on interest rates and improve liquidity conditions.”
Meanwhile, Ether (ETH) saw its first weekly outflows in five weeks, totaling $169 million. Daily outflows persisted throughout the week, suggesting a cautious sentiment among investors despite Ethereum’s ongoing network upgrades.
Butterfill noted that “2x leveraged ETPs remain popular,” indicating some traders are still betting on short-term volatility.
The broader altcoin market showed mixed results last week, as crypto ETP outflows slowed across several tokens. Solana (SOL) and XRP experienced smaller inflows compared to prior weeks, with $29.4 million and $84.3 million respectively.
In particular, Solana’s inflows dropped by more than 81% from the previous week, a sign that investors may be pausing ahead of the launch of several US-based crypto exchange-traded funds (ETFs) expected later this quarter.
“Altcoin ETP flows have been cooling as investors focus more on Bitcoin’s macro-driven recovery,” said Marcus Hill, Senior Analyst at Arcane Research. “However, the broader picture still reflects healthy diversification, not a flight to safety.”
Despite fluctuating altcoin activity, total assets under management (AUM) in crypto funds rose to $229 billion, with cumulative inflows for 2025 reaching $48.9 billion, CoinShares confirmed in its weekly report.
The return of capital to digital assets underscores how sensitive the sector remains to macroeconomic signals, especially inflation and rate policy.
The link between CPI data and crypto ETP outflows has become increasingly evident throughout 2025, as investors weigh crypto’s performance against traditional markets.
Economists say that if the Federal Reserve maintains a dovish trajectory through late 2025, crypto ETP outflows could continue to decline while institutional participation grows. However, uncertainty around fiscal policy, including the US government shutdown remains a potential headwind.
“Investors are watching inflation data like hawks,” said Linda Carter, Senior Economist at ING Global Markets. “Even modest shifts in expectations can swing flows dramatically, and crypto ETPs are among the first to reflect those shifts.”
The latest trend suggests that digital asset funds are reclaiming their position as high-beta plays in a softening monetary environment, rather than merely speculative vehicles.
Analysts note that inflows into Bitcoin products typically precede broader altcoin rallies, hinting that the next phase of recovery could extend across the crypto spectrum if macro conditions remain supportive.
While the recent inflows mark a decisive break from prior crypto ETP outflows, analysts remain cautiously optimistic. The durability of this rebound will depend on the next round of inflation data and the Fed’s upcoming policy meetings.
For now, the combination of easing price pressures, stabilized interest rates, and rising investor risk appetite paints a constructive short-term outlook for crypto markets.
“The market’s reaction to the CPI data shows that investors are ready to re-enter once the macro clouds clear,” Butterfill added. “But sustained confidence will depend on continued evidence of inflation moderation.”
