Cryptocurrency markets remained largely flat on Wednesday following the release of the latest Consumer Price Index (CPI) report, which showed U.S. inflation rose in line with analysts’ expectations for August. Bitcoin (BTC) and Ethereum (ETH) were relatively unchanged from the previous day, with BTC trading at $57,000 and ETH holding at $2,340. Other major cryptocurrencies faced downward pressure, with Polkadot (DOT) and Solana (SOL) down 1.5% The Labor Department's CPI report revealed a 0.2% increase in prices for August. The annual inflation rate now stands at 2.5%, the lowest since February 2021. This suggests that inflation has cooled, although core inflation — which excludes food and energy prices — rose slightly more than expected at 0.3%, driven by higher housing costs. Overall, the data points to a continued easing in inflation, but certain sectors, like housing, are still contributing to upward pressure. Rising inflation typically leads to reduced risk appetite among investors, causing assets like Bitcoin and Ethereum to experience increased volatility. “With annual inflation cooling down in line with expectations, we could see a recovery of investors’ appetite for risk-on assets like crypto, instigating more flows into Bitcoin spot ETFs, which have been especially quiet over the past week,” said Leena ElDeeb, Research Analyst at 21Shares. Bitcoin Exchange Outflows of $750M According to IntoTheBlock (ITB), Bitcoin recorded a $750 million net outflow from exchanges on Tuesday, the largest since May. “This signals significant accumulation by $BTC holders,” IntoTheBlock tweeted. Large transfers from exchanges could signal institutional interest. These investors typically move assets off exchanges to safeguard them in private wallets or as a prelude to long-term accumulation in anticipation of future price increases. Crypto traders were disappointed by Tuesday’s Trump-Harris debate, which did not touch on crypto policy. “The absence of a clear frontrunner in this election, coupled with the murky policy stances from both parties, heightens the possibility of a risk-off move in risk assets as we approach Election Day,” QCP Capital wrote. Crypto Stocks Under Pressure Crypto-linked stocks also reacted to the inflation data. Shares of Coinbase dropped 2% on Wednesday, while MicroStrategy slipped 3%. Bitcoin mining firms, which had rallied earlier in the week, reversed course, with Marathon Digital and Riot Platforms sliding 4% and 2%, respectively.