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Since the disappointing payrolls data two weeks ago, it has become increasingly clear from the fund flows data that digital asset investors are adopting a more cautious stance. Following Jackson Hole, where the Fed signalled that the focus of monetary policy had shifted from inflation to employment, our expectation was that the subsequent string of weak labour market data would prompt investors to start building Bitcoin positions earlier. Instead, in conversations with clients over the past fortnight, it has been evident that many prefer to sit on the sidelines until they gain more clarity from incoming inflation data. This reflects just how deeply macroeconomic conditions now influence investor behaviour in digital assets. From our perspective at CoinShares, this is both logical and encouraging, as it demonstrates a maturing mindset among investors who are increasingly integrating fundamental macro drivers into their decision-making.
Flows at the start of this week were underwhelming, with just US$400m of inflows in the first two days. However, once the PPI and CPI figures were released, momentum improved dramatically, adding a further US$1.6bn. While headline inflation came in marginally above expectations, markets quickly concluded that the overshoot was trivial in the context of Fed decision-making. Importantly, the release reassured investors that inflation will not be the primary obstacle at next week’s FOMC meeting on September 17th. This rapid increase in flows illustrates how sensitive digital asset markets are to shifts in macro perception, and highlights that the Fed’s evolving narrative is now the dominant catalyst.
Our view remains that the tariffs recently introduced are best seen as a one-off step change in prices rather than a driver of persistent inflation. Energy costs are already rolling over, housing rents are slowing, and the labour market is weakening, all pointing to a softer inflation outlook as we progress through 2026. Investors should also note that core goods, the category most exposed to tariffs, represent only 19% of the CPI basket. Services dominate, and here wages are the primary determinant. With job vacancies now fewer than unemployed workers, wage growth is slowing, further reinforcing the case for disinflation.
Although inflation is a touch higher than anticipated, the clear shift in Fed priorities means the labour market is now the focus. Rising jobless claims hint at a growing pace of layoffs, while subdued hiring suggests companies are pulling back. For the Fed, this poses a more pressing risk to growth and financial stability than the marginal impact of tariffs on prices. As such, we expect to hear increasingly dovish rhetoric from policymakers, a shift that should reassure digital asset investors and encourage renewed allocations.
For Bitcoin and the broader digital asset space, the alignment of factors is constructive. A Fed that leans dovish into a weakening labour market, alongside moderating real yields, creates an environment where Bitcoin’s appeal as a macro hedge is reinforced. Flows are already reflecting this, with the jump in allocations following CPI serving as a timely reminder of how quickly sentiment can pivot. Into year-end, we see a supportive backdrop for digital assets, with investors poised to add to positions as the Fed confirms its new policy trajectory.
