Crypto gains as inflation fears grow and tech stocks struggle, highlighting shifting investor sentiment - IcoHolder.

Bitcoin has bounced back from a weekend dip, stabilizing near the $110,000 mark, fueled by a remarkable 30-day streak of net inflows into spot ETFs such as BlackRock’s IBIT. This sustained investment highlights growing institutional confidence in cryptocurrencies as a long-term asset, according to market analysts at QCP. Meanwhile, traditional tech stocks, particularly leveraged funds like the TQQQ, are experiencing significant outflows amid dwindling expectations for Federal Reserve rate cuts and mounting inflation concerns. Investors are adopting a more cautious stance as they await Friday’s critical Core PCE inflation report, which could further influence market dynamics.

QCP notes that this divergence reflects a broader shift, with some investors rotating away from expensive tech equities toward crypto assets. The cryptocurrency market’s increasing maturity, marked by more advanced hedging tools and reduced dependence on leverage, has made it more resilient to macroeconomic shocks compared to previous cycles. Additionally, recent geopolitical tensions, including unexpected tariff threats from former President Trump targeting the EU, have added strain to equity markets. Crypto’s digital and decentralized nature allows it to remain relatively insulated from such political and supply chain disruptions.

The upcoming Core PCE inflation data is seen as a pivotal factor that could reshape investor behavior. Higher-than-expected inflation would likely postpone any Fed easing, exacerbating pressures on tech stocks. Concurrently, global shipping delays—particularly in Europe—are driving up costs, which could further challenge tech firms but leave crypto largely unaffected. QCP suggests that persistent inflation might ultimately boost crypto’s appeal as a hedge, reinforcing its growing edge over traditional tech investments.