Crypto Market Soars After US CPI, but Analysts Say Bigger Forces Are at Work

Key Insights:

• The crypto market advanced after July US CPI matched forecasts, easing inflation concerns.
• Bitcoin and Ethereum ETFs recorded positive seven-day net inflows.
• NYSE continues developing onchain settlement infrastructure for eligible tokenized securities.

The crypto market moved higher on Wednesday after July U.S. inflation data matched economists’ expectations. Bitcoin and major altcoins gained as the US CPI report eased immediate inflation concerns.

However, analysts pointed to institutional ETF flows and blockchain settlement development as broader forces supporting the market. The inflation report also lifted U.S. stocks while government bond yields moved lower during morning trading.

Crypto Market Rise After July US CPI

U.S. consumer prices increased 3.4% year over year in July, according to data shared by the US Labor Department. That marked a decline from June’s 3.5% annual inflation rate. Moreover, the reading matched economists’ forecasts.

On a monthly basis, consumer prices increased 0.1% during July. That figure also matched market expectations. Consequently, expectations for unchanged Federal Reserve rates increased slightly after the inflation release.

The report arrives before the Federal Reserve’s September policy meeting. Traders remain divided between unchanged rates and a quarter-percentage-point increase. Meanwhile, the July employment report had already given policymakers additional room to keep rates steady.

Against that backdrop, crypto prices moved higher following the CPI release. Bitcoin climbed 0.6% to $64,051. Ethereum increased 1.5% to $1,909. Solana rose 0.8% while XRP was up 0.2%.

However, the post-CPI gains formed only one part of the broader crypto market picture. Walter Bloomberg, a pseudonymous social media account, cited analysts highlighting other market drivers.

ETF Flows Add Another Layer to Crypto Market

According to the account, analysts pointed toward institutional capital entering crypto exchange-traded funds. They also highlighted growing adoption of blockchain-based settlement systems.

The data on ETF flows from August 12 put further context on institutional activity. Bitcoin ETFs saw net outflows of 265 BTC, or about $16.97 million, in a single day.

However, seven-day Bitcoin ETF flows remained positive. The funds had net inflows of 4,711 BTC, or about $301.16 million.

Ethereum ETFs followed a different pattern. They recorded one-day net inflows of 3,823 ETH, or about $7.28 million.

Seven-day inflows to Ethereum ETFs also reached 89,742 ETH. That amount carried an estimated value of $170.83 million.

These figures placed the CPI-related market move alongside continuing institutional activity. Meanwhile, developments in tokenized securities added another structural element to the market.

NYSE Advances Onchain Settlement Infrastructure

Notably, New York Stock Exchange President Lynn Martin addressed tokenized securities infrastructure on August 10. She said the exchange continues developing systems for onchain settlement.

The work follows NYSE’s participation in DTC’s July tokenization pilot. That pilot processed live production trades across several asset classes.

Earlier, NYSE outlined a digital trading platform plan in January. The proposal targets 24-hour trading, instant settlement, fractional shares and stablecoin-based funding.

Moreover, an April SEC filing enabled eligible tokenized securities to trade alongside traditional NYSE-listed shares. The development connected tokenized assets with existing market infrastructure.

DTCC also plans to launch its tokenization service in October. Its July activity involved live tokenized trades among 30 participating firms.

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