Bitcoin Tops $116K, Ether Gains as Fed Rate Cut Bets Firm Up

Core Insights - Bitcoin briefly surpassed $116,000 following new US inflation data, which raised expectations for a Federal Reserve interest rate cut, positively impacting risk assets [1] - The overall cryptocurrency market increased by 1.5% to $4.1 trillion, with Ether rising 2.5% to $4,519 [1] - Recent economic data, including a decline in the producer price index and revisions to employment figures, have shifted market sentiment towards anticipating monetary easing [2][3] Economic Indicators - The producer price index showed a surprising decline of 0.1%, contrary to expectations of a 0.3% increase, indicating easing wholesale inflation [1] - Consumer price index figures confirmed a rise in headline inflation, but not enough to deter expectations for monetary easing [2] - The Bureau of Labor Statistics revised down employment data, erasing approximately 900,000 jobs, suggesting a weaker labor market than previously believed [3] Market Reactions - The combination of steady inflation and downward revisions in employment data is leading the Federal Reserve to consider rate cuts to support economic growth [4] - Risk assets, including Bitcoin and gold, rallied in anticipation of the Fed's actions, with investors positioning themselves ahead of potential monetary easing [5] - Weekly jobless claims rose to 263,000, reinforcing expectations for a September rate cut as markets balance inflation concerns with signs of slowing growth [6] Institutional Interest - On September 11, spot Bitcoin ETFs attracted $553 million in net inflows, marking the fourth consecutive day of gains, while Ethereum spot ETFs added $113 million [7] - Regardless of whether the Fed opts for a quarter- or half-point cut, Bitcoin continues to draw institutional capital, with its role in investment portfolios expanding [7]