Bitcoin advanced to its highest level in several months as a broad retreat in global bond yields improved the backdrop for risk assets.
Expectations of diplomatic progress at this week’s UN General Assembly have pushed oil prices lower for a fourth consecutive session, easing inflation concerns and financial conditions, supporting demand for the cryptocurrency.
The scope for a further decline in yields may be limited, however. Markets still expect the Federal Reserve to raise interest rates once more before year-end and several times in the months that follow, while the European Central Bank is seen delivering more hikes.
Upcoming inflation releases will therefore be key in shaping monetary policy expectations. Softer readings could extend the recent pullback in yields, while firmer data could revive tightening expectations and cap Bitcoin’s gains.
Institutional demand has added to the momentum. Spot Bitcoin ETFs recorded only USD 6 million in net inflows over the past week, but that figure masks a sharp turnaround in the final two sessions, led by Friday’s USD 433 million inflow. As a result, September flows have swung from roughly USD 279 million in net outflows to approximately USD 313 million in net inflows.
Looking ahead, sustained ETF buying alongside a continued decline in oil prices could extend Bitcoin’s advance. Conversely, any setback in Middle East diplomacy could quickly revive selling pressure.
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