Welcome to Ecoinometrics’ Friday edition.
Each week, we analyze the three most critical market signals impacting Bitcoin and macro assets, delivering institutional-grade insights through data-driven charts and analysis.
Today we’ll cover:
Investors Are Leaning Into This Bitcoin Breakout
A Monetary Trade
Inflation Isn’t Falling As Fast As CPI Suggests
Bitcoin is moving fast again. But a rising price alone doesn’t tell us much about how durable the move might be. What matters now is whether investors are actually committing fresh capital, why they are doing it, and what could interrupt that demand.
In case you missed it, here are the other topics we covered this week:
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The Ecoinometrics Decision
Investors Are Leaning Into This Bitcoin Breakout
Bitcoin’s breakout continues and so far the evidence behind the move keeps getting stronger.
On Wednesday, we looked at a range of momentum indicators that are now pointing in the right direction. But if you want to focus on a single signal today, look at what Bitcoin ETF investors are doing.
The chart below tracks consecutive streaks of ETF inflows and outflows by adding up the Bitcoin bought or sold over each uninterrupted sequence.
Since this breakout began, we have seen nothing but inflows. More importantly, the cumulative buying has now made this the strongest streak of ETF inflows of the entire bear market.
And the comparison is getting interesting. The current streak has already reached roughly the same magnitude as the powerful run of ETF buying we saw around Bitcoin’s all-time high in the fall of 2025.
That gives the breakout some real weight. Whatever happens next, there is clearly meaningful demand behind this breakout.
A Monetary Trade
So why are investors suddenly putting money back into Bitcoin?
There are several possible explanations but the most interesting one right now is that Bitcoin has become part of a broader monetary trade.
Markets have plenty to worry about on that front. Inflation remains above target, government debt keeps expanding, long-term borrowing costs are elevated and investors are trying to figure out how much pressure policymakers will ultimately tolerate before monetary conditions have to change. In that environment, assets that sit outside the traditional monetary system become more attractive.
That’s the narrative. But there is also some interesting evidence behind it.
Look at what is happening with ETF flows into Bitcoin and gold.
Since 2024, demand for the two assets has broadly trended in the same direction, but over shorter periods they frequently diverge. Gold tends to attract defensive flows when investors become more cautious, while Bitcoin still behaves much more like a risk asset.
Right now, that divergence has disappeared. ETF demand for gold and Bitcoin is recovering sharply at the same time.
That synchronization points toward a common driver and monetary concerns are the obvious candidate. Investors don’t need to choose between a traditional safe haven and a risk asset when both can express the same concern about the monetary environment.
That also tells us something about the durability of the current Bitcoin recovery: as long as this monetary trade keeps attracting capital, it provides another source of support for Bitcoin demand. If it stops, Bitcoin is on its own.
Inflation Isn’t Falling As Fast As CPI Suggests
The latest CPI releases have given investors plenty of reason to become more optimistic about inflation.
We’ve now had two consecutive months of substantial declines in year-on-year CPI inflation. If that continues, the Fed has less reason to respond aggressively with additional rate hikes, particularly while elevated bond yields are doing some of the job.
But the picture gets more complicated when we look at the Fed’s preferred inflation gauge.
PCE inflation isn’t falling nearly as quickly. Headline inflation is still running at 3.7%, core inflation at 3.3%, and core services at 3.9%. All three remain comfortably above the Fed’s 2% objective, and there is no convincing downward trend yet.
That matters after what we saw in the previous section. Investors are behaving as though the monetary environment is becoming increasingly favorable to Bitcoin and gold, while the inflation data still gives the Fed good reason to remain cautious.
So far, Bitcoin investors don’t seem particularly bothered by that contradiction. ETF inflows have continued and the breakout has strengthened despite the latest PCE numbers.
But if the current rally is partly a monetary trade, persistent PCE inflation is the clearest challenge to that narrative right now.
That’s it for today. Thanks for reading.
Cheers,
Nick
P.S. Every week, our team conducts extensive research analyzing market data, tracking emerging trends, and creating professional-grade charts and analysis.
Our mission: Deliver actionable macro and Bitcoin insights that help institutional investors and financial advisors make better-informed decisions.
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