Bitcoin climbed to $86,757 on Friday as a softer-than-expected inflation reading strengthened expectations that the Federal Reserve will leave interest rates unchanged at its October meeting. The move also came as spot Bitcoin exchange-traded funds recorded strong third-quarter inflows, although cumulative inflows for 2026 remained below $1 billion.
According to Decrypt, Bitcoin was up 3% over 24 hours and 2% over the week at that level. The cryptocurrency was still about 31% below the record it reached a year earlier. The rise followed data showing that August core personal consumption expenditures inflation, a measure closely watched by the Federal Reserve, increased 3.0% from a year earlier, below the 3.3% economists had expected.
The inflation result changed market expectations for the Fed’s next policy decision. CME’s FedWatch tool put the probability of an interest-rate hold at the October 28 meeting at 74%, compared with 35.8% a week earlier. Traders on Myriad, a prediction market owned by Decrypt’s parent company Dastan, assigned a similar 75% probability. Nexo analyst Iliya Kalchev said the market had been evenly divided as recently as September 29.
Inflation and the Federal Reserve
Recent comments from Fed officials also pointed to a less urgent approach. New York Fed President John Williams said there was “no need for urgency” following September’s rate increase, while retaining another increase later in the year in his baseline outlook. Vice Chair Philip Jefferson said policymakers needed more time and should respond to incoming data and the balance of risks.
The economic picture was mixed. Initial jobless claims fell to 197,000 in the week ending September 26, while continuing claims declined to 1.7 million, their lowest level since March 2023. ADP reported that private-sector payrolls increased by 90,000, exceeding forecasts.
The official employment report released Friday was considerably weaker. Nonfarm payrolls rose by only 29,000 in September, versus forecasts of approximately 90,000, according to the Bureau of Labor Statistics. Unemployment edged up to 4.2%. Revisions reduced July and August payroll growth by a combined 60,000; July was revised to show a loss of 10,000 jobs. Average monthly payroll gains over the past year now stand at 45,000.
The softer employment figures could reinforce the argument for leaving rates unchanged, but they also raise concerns about whether the labor market is losing momentum. September’s consumer-price index report is due on October 14. Kalchev said that cooling inflation without labor-market weakness would generally support risk-sensitive assets, including Bitcoin.
ETF inflows provide additional support
Investor demand through spot Bitcoin ETFs was another important part of the market move. The funds attracted $2.65 billion in September, making it their second-strongest month since October 2025, behind August’s $3.52 billion. Across the third quarter, inflows reached $6.34 billion, according to SoSoValue, while net assets stood at $109.3 billion.
Kalchev counted inflows in 10 of the 11 most recent trading sessions, totaling roughly $3 billion. The strong third quarter largely reversed losses earlier in the year. Spot Bitcoin ETFs recorded outflows of $4.97 billion in the second quarter and $490 million in the first quarter, leaving net inflows for 2026 below $1 billion.
The third-quarter buying occurred despite a 25-basis-point interest-rate increase and a 10-year Treasury yield above 5%. Tim Sun of HashKey said this suggested the inflows reflected allocation decisions rather than simply investors responding to easier liquidity conditions. He also pointed to Morgan Stanley’s ETF receiving more than $200 million in September as evidence that large investment banks’ wealth-management operations were beginning to include Bitcoin in client asset-allocation plans.
Sun said high Treasury yields had previously limited Bitcoin’s advance, while short covering added to buying after the cryptocurrency moved beyond its established trading range.
Positioning and the “Uptober” question
Market indicators offered different interpretations of the rally’s strength. Kalchev said Bitcoin futures open interest was about 12% below its September 22 peak and in the bottom decile of its one-year range, suggesting the advance was not heavily dependent on leverage. Sun, by contrast, said open interest increased as the price rose.
Options activity indicated that investors were protecting against a decline while still positioning for further gains, Kalchev said. Downside protection was concentrated at $80,000 and below, while call options were positioned around $89,000 to $92,000.
October and November have historically been Bitcoin’s strongest months, a pattern traders refer to as “Uptober.” Over the past decade, October has averaged an 18% gain, while the combined average for the quarter was 46%, according to Stephen Wundke of Algoz. He said traders currently saw more potential upside than downside, although the outlook remained dependent on upcoming economic data.
The case is not settled. The 10-year Treasury yield is at its highest level since 2002, and the Fed still projects another rate increase this year. A stronger payrolls report or hotter-than-expected consumer inflation could revive expectations of a December move. Wundke estimated the possibility of an October hike at 40%, above the 26% implied by futures at the time of his comments.
Owen Yang, chief executive of payments platform UPay, took a more cautious view. He said ETF flows and the Securities and Exchange Commission’s work on custody continued to support the institutional argument for Bitcoin, but added that institutions entering at current price levels could reduce the potential for further upward momentum. Kalchev said Bitcoin was actively reflecting the market’s changing expectations for economic data and Federal Reserve policy.
Moneyiar market picture
Moneyiar market data at 09:29 on October 3 showed Bitcoin at $84,598.58, down 1.75% over 24 hours but up 0.71% over seven days. The data places the cryptocurrency below Friday’s $86,757 level reported by CoinGecko.
Among the other assets tracked by Moneyiar, AKEDO was at $0.03248, up 3.64% over 24 hours and down 1.43% over seven days. Comedian traded at $0.06266, falling 4.92% over 24 hours and 9.11% over the week.
