Flows Return: Bitcoin Hits $116k on Record ETF Inflows Ahead of Fed Cut

“Flows are back.” BTC/ETH ETFs posted one of the strongest weekly nets since July as softer inflation and labor data tilted the Fed firmly toward easing. A surprise contraction in PPI and higher jobless claims gave the market the green light, sending Bitcoin to $116k and igniting flows into ETFs and high-beta alts. Risk appetite returned selectively (SOL, Toncoin), while corporate treasuries and DeFi protocols deepened their exposure to U.S. Treasuries. With the ECB holding steady and the Fed now in focus, markets are primed for a cut this week.

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Price Action & Flows

Bitcoin advanced steadily, climbing from $111k to $116k, briefly testing all-time-high levels before consolidating. The move was underpinned by heavy ETF demand:

• BTC ETFs: $2.3–2.34B net inflows; record single-day $553M (Sep 11). AUM: BTC >$100B.
• ETH ETFs: $638M weekly inflows (Sep 8–12), led by Fidelity’s FETH (~$381M). AUM: ETH ~$20B.
• SOL: Seven-month highs; REX-Osprey SOL ETF surpassed $200M AUM.
• Altseason: Toncoin flipped ADA in market cap, hitting new ATHs on Telegram adoption. Altseason index near 84, though breadth uneven.

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Macro & Policy — Data Recap (Sep 8–12)

The macro backdrop was the true catalyst for this week’s rally. The spark came on Wednesday when U.S. PPI printed negative, with both headline and core readings at –0.1% versus expectations of +0.3%. That disinflationary surprise suggested upstream price pressures are easing more rapidly than anticipated. Less than 24 hours later, jobless claims reinforced the trend, climbing to 263k against forecasts of 235k. The combination of softer producer prices and rising claims painted exactly the picture markets wanted: inflation cooling, labor weakening, and the Fed cleared to cut.

By Thursday, when CPI showed a steady +2.9% year-on-year pace and core inflation at +0.3% m/m, investors barely flinched at the slightly hot +0.4% headline number. The narrative was already locked: the Fed has cover to ease. Futures moved to fully price a 25 bp cut at the September 17 meeting.

Other data rounded out the week. The ECB held its Main Refinancing Rate unchanged at 2.15%, underscoring its long pause. UK GDP stagnated at 0.0% versus a prior +0.4%, U.S. consumer sentiment fell to 55.4 (below 58.2 expected), and inflation expectations held at 4.8%. Together, the story was one of cooling inflation and softening growth, tilting the balance of risks toward easing both in the U.S. and globally.

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Regulation & Legal

Regulators added to the sense of a shifting landscape. In Washington, the SEC under Paul Atkins moved further away from the combative tone of the Gensler era. Atkins emphasized a “warning-first” enforcement posture and opened the door to exploring tokenized securities frameworks. The agency’s Crypto Task Force has already scheduled a roundtable on October 17, focusing on privacy and surveillance — a clear signal that dialogue and engagement are now on the agenda.

In the UK, the Bank of England floated a proposal to cap retail holdings of systemic stablecoins at £10,000–20,000. Industry pushback was immediate, with critics warning that such limits would cripple competitiveness at a time when London is trying to position itself as a digital asset hub. Meanwhile, in Europe, the implementation of MiCA gathered pace. ESMA updated its official registers on September 10, while national regulators like BaFin continued to roll out new authorizations. The regulatory story, in short, is turning more nuanced: the U.S. is softening, Europe is methodically implementing, and the UK is experimenting with tighter controls.

New Stablecoin Spotlight — USAT (USA₮)

Tether made headlines this week by unveiling USAT (USA₮), a U.S.-regulated stablecoin designed to complement USDT while meeting the requirements of the newly passed GENIUS Act. Unlike USDT, which operates globally under looser frameworks, USAT is built specifically for U.S. residents and will be issued under the oversight of Anchorage Digital Bank, with reserves custodied by Cantor Fitzgerald. The coin will be fully backed by highly liquid dollar-denominated assets such as cash and short-dated Treasuries, aligning with the Act’s mandate for transparency and safety.

The move marks a significant shift in Tether’s strategy. By separating its global USDT product from a U.S.-compliant stablecoin, the company is both protecting its core franchise and positioning itself for growth in the world’s largest capital market. To lead the effort, Tether appointed Bo Hines, a former White House crypto advisor, as CEO of the U.S. division. The company has also committed to regular reserve reporting, a key feature that regulators demanded and which differentiates USAT from the legacy structure of USDT.

In effect, USAT represents Tether’s bid to remain dominant in a post-GENIUS Act landscape. If successful, it could pull significant institutional adoption back into the Tether ecosystem inside the United States, while leaving USDT as the global, offshore counterpart. For investors and institutions, this dual-coin strategy could offer more flexibility but also introduces new dynamics to stablecoin competition — particularly against Circle’s USDC, which has until now been seen as the more compliant option in the U.S.

Corporate, ETFs & On-Chain

Corporate treasuries and DeFi protocols continued to lean into U.S. Treasuries as Bitcoin accumulation persisted.

• Strategy (ex-MicroStrategy): Bought 1,955 BTC (~$217M) on Sep 8; total holdings now 638,460 BTC. Missed S&P 500 inclusion.
• Eightco: Announced treasury allocation into Worldcoin (WLD); stock rallied sharply.
• Tokenized Treasuries: AUM above $2.3B across Ethereum and Solana. Several LatAm banks piloting tokenized T-bills as liquidity buffers.
• MakerDAO: Approved another $500M allocation into U.S. Treasuries; RWAs ~$4.5B.
• Stablecoins: USDT steady near $124B; USDC added ~$300M, likely tied to ETF arbitrage flows.
• On-chain: BTC miner reserves climbed, reducing immediate sell pressure. ETH gas fees cooled as L2s (Base, Arbitrum) handled ~70% of new activity.
• Regional: HK SFC added ETFs to its pipeline; Dubai VARA floated draft lending rules (consultation open through October).

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What We’re Watching Next (Sep 15–22)

The upcoming week is dominated by central bank events and their market impact:

• Sep 16: UK wage and claimant count, German ZEW, U.S. Core Retail Sales (+0.4% expected).
• Sep 17: FOMC decision — 25 bp cut expected (to 4.25%); focus on dot plot and projections. ECB’s Lagarde also speaks.
• Sep 18: Bank of England decision (hold at 4.00% expected). U.S. Jobless Claims and Philly Fed Index.
• Sep 19: Bank of Japan Policy Rate (<0.50% hold expected). UK Retail Sales.

For crypto, the test is whether ETF inflows can sustain above $2B per week after the Fed. Solana’s ETF growth and Toncoin’s momentum remain in focus, alongside tokenized Treasury adoption by banks and asset managers. In traditional markets, dollar and U.S. Treasury moves will dictate whether risk appetite holds. On the regulatory front, the SEC’s October 17 roundtable and the BoE’s consultation feedback loom, while MiCA licenses continue rolling out across Europe.