Bitcoin slides after U.S. inflation data fails to boost crypto

Bitcoin fell on Thursday after U.S. inflation data failed to spark sustained gains, with spot bitcoin exchange-traded funds recording their first two-day outflow since late July.

The largest cryptocurrency slipped below $63,000 by midday in New York, erasing last week’s modest rebound and extending a pullback from recent highs. Data from Farside Investors showed spot bitcoin ETFs posted net outflows of $16.5 million on Wednesday, followed by a smaller $5.4 million outflow on Thursday, marking the first consecutive daily drawdowns since July 24.

The decline in ETF demand coincided with a broader retreat in crypto markets, where major altcoins such as ether and solana traded largely flat, failing to capitalize on the inflation print. Analysts attributed the muted reaction to lingering skepticism over the Federal Reserve’s policy path, despite the cooler-than-expected consumer price index report.

U.S. CPI rose 3.2% year-over-year in July, below forecasts of 3.3% but above the Fed’s 2% target, reinforcing expectations of a cautious approach to rate cuts. Bitcoin, often viewed as a risk asset sensitive to liquidity conditions, has struggled to sustain momentum in the absence of clear dovish signals from policymakers.

Trading volumes across spot bitcoin ETFs totaled $1.2 billion on Wednesday, down from $1.5 billion the prior day, reflecting reduced investor appetite. Meanwhile, the Grayscale Bitcoin Trust (GBTC) continued to see outflows, offsetting inflows into lower-fee alternatives such as BlackRock’s IBIT and Fidelity’s FBTC.

Market participants noted that the ETF outflows, while modest, underscore the fragility of crypto’s recent rally, which had been supported by speculation around potential Fed easing. With inflation still elevated, traders are pricing in a more gradual easing cycle, limiting upside for risk assets like bitcoin.