Ethereum Soars 9% as Crypto Markets Rally on Cooler Inflation and ETF Inflows

Crypto prices surged on Wednesday, led by Ethereum, after fresh U.S. inflation data gave traders new hope that interest rate cuts could be closer than expected. A sharp drop in core producer prices helped fuel a broad rally in digital assets, while spot ETF inflows added even more fuel to the fire.

Bitcoin pushed higher, though still just shy of its all-time high, while Ethereum clocked its best one-day performance in months.

Ethereum Steals the Spotlight with 9% Daily Jump

Ethereum had a day to remember.

The world’s second-largest cryptocurrency surged nearly 9% to hit $3,312 — a level it hasn’t seen since February. It was, by far, the best performer among the top 20 tokens.

That wasn’t a fluke. ETH has been gaining steam all week, up over 25% in the past seven days. And the move came with strong momentum, despite a broader lull in the market’s total capitalization.

Bitcoin also saw gains, though more modest. BTC rose 2.4% to $119,560, leaving it just 2.6% below its all-time high of $122,800 hit earlier this week.

Solana rallied 7.4% to $173. XRP jumped over $3, adding 5% on the day and 28% for the week.

Liquidations Spike as Shorts Get Crushed

As prices shot up, short sellers paid the price.

Data from CoinGlass showed that over $366 million in positions were liquidated in just 24 hours. Of that, Ethereum positions accounted for nearly half — a staggering $167 million — followed by $55 million in Bitcoin liquidations.

Most of these liquidations came from bearish bets.

Shorts made up $283 million of the total, with the largest single liquidation — a $2.43 million ETH/USDT order — occurring on Binance.

That kind of shakeout tends to feed rallies, as forced buys drive prices higher.

ETFs Keep the Fire Burning with Strong Inflows

The latest push wasn’t driven by inflation data alone.

U.S.-listed spot Bitcoin ETFs hauled in over $402 million in inflows on Tuesday, according to SoSoValue. Ethereum ETFs, while trailing behind, still pulled in a solid $192 million.

That marks the ninth straight day of inflows for both BTC and ETH ETFs — a trend that suggests institutional interest remains strong.

Some of the biggest inflows came from:

• Fidelity Wise Origin Bitcoin Fund (FBTC): $102M

• BlackRock’s iShares Bitcoin Trust (IBIT): $94M

• Grayscale Ethereum Trust (ETHE): $81M

All this buying, combined with soft inflation prints, gave crypto bulls a perfect storm to work with.

PPI Surprise Eases Fed Pressure

Wednesday’s market action followed a cooler-than-expected read on wholesale prices.

June’s Producer Price Index (PPI) stayed flat month-over-month. Analysts were expecting a 0.2% increase. Core PPI, which strips out food and energy, also showed zero growth.

That helped validate Tuesday’s CPI report, which showed a 0.2% monthly rise in core prices and 2.9% annual inflation — in line with expectations.

But the PPI report came in below expectations across the board:

This was the softest producer inflation since September 2024.

That’s got traders whispering again about a September rate cut.

Trump Backs Off Powell Firing Talk, For Now

As if the inflation prints weren’t enough to stir up headlines, President Donald Trump added a little extra drama.

Rumors swirled early Wednesday that Trump was planning to fire Fed Chair Jerome Powell if he won the election. But later in the day, the president quashed those reports.

“I don’t rule out anything,” he told reporters, “but I think it’s highly unlikely unless he has to leave for fraud.”

That’s a dramatic shift in tone, considering Trump has spent months criticizing Powell on Truth Social.

Here’s what Trump posted Tuesday: “Fed should cut Rates by 3 Points. Very Low Inflation. One Trillion Dollars a year would be saved!!!”

The Fed, meanwhile, is treading carefully. With Trump’s proposed tariffs expected to kick in August 1, officials are reportedly holding back on rate moves to better gauge their economic impact.

And Powell? Still focused on the data, not the drama.