U.S. Federal Reserve rate expectations remain in focus as inflation cools, underpinning a cautious rebound in digital assets led by Bitcoin. CME FedWatch shows a 95% probability that the Fed will keep rates at the current level this month, with June’s probability of a cut rising to about 45%. Bitcoin rose about 4.94% for the week, trading near $95,000 after briefly touching the $97,000 level, while Ethereum gained 6.72%, BNB 4.53%, and Solana 2.57%. Institutional money has begun flowing back into crypto, with net inflows totaling around $1.5 billion into 11 U.S.-listed Bitcoin spot ETFs this month.
December’s CPI rose 2.7% year over year, below market expectations, softening inflation fears and reducing the urgency for additional tightening. Analysts say lower rates could boost liquidity and channel more funds into digital assets, supporting a broader risk-on environment for crypto markets.
A market observer noted that the shift away from immediate rate hikes has helped risk assets regain traction, including the crypto sector. An NH Investment & Securities analyst suggested measures that undermine dollar confidence could elevate stores of value like gold and Bitcoin, potentially benefiting crypto markets.
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