By Francisco Rodrigues (All times ET unless indicated otherwise)

The cryptocurrency market is still enjoying a rally on the back of Tuesday's higher-than-expected core inflation reading that boosted chances of a Federal Reserve interest-rate cut next month. Some traders are even calling for a 50 bps cut.

The euphoria has lifted the CoinDesk 20 ( CD20 ) index of largest cryptocurrencies more than 1% in the last 24 hours, and sent bitcoin (BTC) to a record high over $124,000 and ether (ETH) 2.2% higher to $4,750, just below its record.

Headline inflation data for July came in cooler than expected, but rising core inflation fed into rate-cut expectations. On Polymarket , traders now weigh an 80% chance of a 25 basis-point cut in September, while chances of a 50 bps cut rose to 8.3%. The CME FedWatch tool shows a 97.8% chance of a 25 bps cut, and a 2.2% chance of a 50 bps cut.

In the geopolitical front, President Donald Trump is expected to meet Russian President Vladimir Putin this Friday in Alaska. The meeting comes as the U.S. president ramps up pressure for a ceasefire in Ukraine. A follow-up meeting with Ukraine’s President Volodymyr Zelenskyy may also be on the cards. Deescalation measures, including a potential air truce, are currently on the table.

Institutional demand has made this the best week for spot ether ETFs net inflows, with $2.27 billion coming in according to SoSoValue data. Meanwhile, corporate accumulation led by BitMine has seen ETH treasures accumulate over 3.5 million ETH.

“Bitmine’s capital raise to build its ETH treasury has drawn attention, with the market noting that any allocation to ETH has an outsized impact compared with BTC, given ETH’s smaller market cap and marginally thinner liquidity,” analysts at QCP Capital wrote . ”We expect the current momentum in ETH to persist as long as fresh flows continue into ETH DATs.”

Bitcoin treasuries, including ETFs, have grown their holdings by around 3.36% in the past 30 days to 3.64 million BTC . That’s more than 17% of the cryptocurrency’s total supply.

Put together, the cryptocurrency market is benefiting from four key tailwinds. These are the anticipated rate cuts, a friendlier regulatory climate, easing geopolitical tensions and rising institutional and corporate interest.

Looking ahead, investors will be closely monitoring today’s Producer Price Index (PPI) data for further clues on what the Fed might do in September. Stay alert!

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