Bitcoin surged past $114,000 on Thursday morning, driven by unexpectedly favorable U.S. inflation data and a notable uptick in institutional investments in spot exchange-traded funds (ETFs). The cryptocurrency experienced a significant spike after the U.S. Producer Price Index (PPI) revealed a 0.1% month-on-month decline in wholesale inflation for August, with the year-on-year rate slowing to 2.6%. This better-than-expected PPI data acted as a catalyst for risk assets, allowing Bitcoin to breach the critical $113,000 mark.
At the time of reporting, Bitcoin was trading at $114,100, reflecting a rise of more than 2% on the day, according to data from CoinGecko. The broader cryptocurrency market mirrored this upward trend, with total market capitalization increasing by 1.5% to reach $4.06 trillion.
Ethereum also capitalized on the rally, trading above $4,440 in early sessions, buoyed by growing ETF interest and on-chain accumulation. Timothy Misir, head of research at BRN, noted that the PPI’s unexpected decline served as a clean catalyst for Bitcoin’s rise to $114,000, while institutional flows into the market intensified. He emphasized the significance of upcoming Consumer Price Index (CPI) data—if it comes in softer than expected, it could sustain the current momentum and alleviate volatility. Conversely, any upside surprises could lead to rapid derisking in the market.
Institutional interest in spot Bitcoin ETFs has surged, with Bitcoin funds attracting a remarkable $757 million in net inflows as of September 10, marking three consecutive days of gains according to BRN data. Ethereum ETFs also reported a solid inflow of $172 million. In a significant move, blockchain infrastructure firm Bitmine disclosed it had added 46,255 ETH, valued at around $201 million, to its holdings, bringing its total stash to over 2.1 million ETH worth approximately $9.24 billion.
The crypto derivatives market indicates a growing propensity for risk-taking among traders. The total open interest for Bitcoin futures climbed to $84.86 billion, while forced liquidations dropped to $37.96 million, primarily affecting those who had taken bearish positions against the rally. Overall trading activity in Bitcoin futures expanded to about $53 billion, highlighting strong participation from both retail investors and those utilizing leverage to enhance their stakes.
Market participants are now keenly awaiting the CPI data to determine the next phase of momentum. A subsequent soft inflation print could bolster expectations that the Federal Reserve might opt for three rate cuts by the year’s end. However, a hotter CPI reading could reverse the current trend, negatively impacting Bitcoin ETF flows and applying new pressure on risk assets.
