Billions Are Flowing In, So Why Isn’t Bitcoin Moving?

Why this report matters

Bitcoin is up, but barely—just 13% year-to-date—and yet over $63 billion in liquidity has flowed into crypto markets. With the Fed signaling potential cuts and inflation cooling, something doesn't add up. The usual drivers, ETFs, stablecoins, and corporate buyers, are active, but Bitcoin isn’t responding as it did last year. Under the surface, traders are shifting how they express bullishness, quietly adapting to falling volatility and narrowing leadership. Could this structural shift explain Bitcoin’s muted rally, and what it means for what comes next?

Year-to-date and 2024 liquidity inflows ($ billions) and as % of 2024

Main argument

When the Fed unexpectedly cut interest rates by 50 basis points in September 2024, markets reacted swiftly—10-year bond yields rallied, signaling that investors saw the move as a policy misstep. At the time, inflation had already declined from 3.5% in April and would bottom just a month later at 2.4%. Although inflation briefly rose to 3.0% in February 2025, it has since eased and stabilized at 2.4% for three consecutive months. With the window for tariff-driven inflation narrowing, all eyes are now on the upcoming July 15 CPI release.

Fed Chair Powell, along with most of his colleagues and many Wall Street economists, had warned that tariffs would push inflation back above 3%. So far, that hasn’t happened. Inflation remains anchored, and the unemployment rate has held steady at 4.2% for nearly a year, defying fears of labor market deterioration. The Fed’s tone is shifting.

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