Inflation-Fueled Rate Hike Odds Send Crypto Market Reeling

Ripple made significant strides in expanding its institutional finance footprint with the introduction of governed AI agents for treasury management. The new product, part of Ripple Treasury, allows companies to analyze cash, liquidity, and risk using artificial intelligence. However, this development does not automatically create demand for $XRP.

The real market driver over the past 24 hours has been inflation, which pushed the probability of a 25bp Fed hike next week from 72% to 86%. This increase in the likelihood of a rate hike is a headwind for cryptocurrencies like $BTC, $ETH, and $XRP. The August US inflation report showed a 0.4% monthly and 3.4% annual headline CPI, while core CPI came in at 0.3% monthly and 2.4% annual.

Institutional demand for Bitcoin and Ethereum has weakened due to the Treasury yields nearing 5%. The latest completed US session recorded a net outflow of $282.7M from spot $BTC ETFs and $29.9M from spot $ETH ETFs, leading to a cumulative loss of approximately $449.5M across three sessions.