In the past day, the price of Bitcoin (BTC) has shot up to $66,000, marking a significant 7% jump. This spike is linked to various big-picture economic factors, including the latest numbers on inflation in the United States.

Bitcoin's Price Soars as US Core Inflation Drops

Recent data on the US Consumer Price Index (CPI) revealed a decline in core inflation, hitting a low not seen in three years at 3.4%. This news has spurred activity in the Bitcoin market, catching the attention of major global banks. The connection between lower inflation and heightened interest in digital assets suggests that investors may view Bitcoin as a safeguard against economic uncertainty.

The positive inflation figures also hint at potential future cuts in US interest rates. While the Federal Reserve has taken a cautious approach, the latest data might speed up their decision-making process. However, there are concerns about the pace at which inflation is dropping, which could limit the extent of rate cuts this year.

Major Banks Drive Bitcoin Surge with ETF Investments

The increase in Bitcoin's price is also being fueled by growing institutional interest, particularly in Bitcoin Exchange-Traded Funds (ETFs). Recent filings with the Securities and Exchange Commission (SEC) show that major banks like JPMorgan and Wells Fargo, as well as international banks such as UBS and Bank of Montreal, have made significant investments in Bitcoin ETFs. These disclosures have had a significant impact on Bitcoin's market value.

Additionally, investments from entities like the State of Wisconsin Investment Board, which recently put $99 million into BlackRock's Spot Bitcoin ETF, are adding to the market's momentum. This influx of institutional money not only confirms Bitcoin's appeal as an investment but also strengthens its credibility and stability as an asset class.

The ETF market is buzzing with anticipation as more institutions are expected to join in. The recent appointment of Salim Ramji, former head of global ETFs at BlackRock, as CEO of Vanguard, is particularly noteworthy. Vanguard, which had previously steered clear of spot Bitcoin ETFs, may reconsider its position under Ramji's leadership, potentially leading to increased institutional participation.

This shift is likely to sustain Bitcoin's upward trajectory as more institutional investors include it in their portfolios. The ongoing developments in the ETF sector, combined with broader economic factors, offer a solid explanation for Bitcoin's recent and continued price surge.