Bitcoin Market Update: Institutional Investments and Easing Inflation Help Steady Crypto Investor Confidence

On October 28, 2025, the Fear & Greed Index for the cryptocurrency sector reached 50, indicating a "neutral" outlook, a notable improvement from the previous week's "extreme fear" reading of 25, according to

. This steadying of sentiment comes as the market navigates a mix of macroeconomic signals, regulatory updates, and ongoing institutional capital movements that continue to influence crypto trends.

The index, which compiles data from volatility, trading activity, social engagement, and

market share, suggests investors are balancing between caution and risk appetite, as outlined in . In recent weeks, the index dropped sharply to 25 on October 22, coinciding with Bitcoin’s 14.6% decline to $106,825 and broader uncertainty over U.S. inflation and geopolitical events, Coinotag reported. However, renewed capital entering digital assets and softer inflation figures have since helped restore market confidence.

Investors are paying close attention to the U.S. Federal Reserve’s policy direction. The Consumer Price Index report for September 2025, released on October 24, revealed core inflation rose by 0.2%, slowing from the 0.3% increases seen in July and August, according to

. This data strengthened expectations for interest rate reductions, prompting $921 million to flow into digital asset investment products last week, with Bitcoin alone drawing $931 million, as noted in . "The change in macroeconomic outlook has sparked renewed institutional interest in digital assets," CoinShares analysts commented in , highlighting that Bitcoin’s assets under management have surpassed $178 billion.

Political events have also played a role in shaping sentiment. U.S. President Donald Trump’s decision to pardon Binance founder Changpeng Zhao triggered a brief surge in cryptocurrency prices. Over the past week, Bitcoin climbed 3.5%, while

and Binance Coin (BNB) advanced by 5% and 4%, respectively, according to . Nonetheless, analysts warn that although this move is positive for crypto adoption, the overall market will remain dependent on larger macroeconomic factors such as U.S.-China trade relations and inflation developments.

Regional investment flows revealed differing strategies among investors. The U.S. led with $843 million in crypto fund inflows, while Germany saw a record-breaking weekly inflow of $502 million, based on the Yahoo Finance report. In contrast, Switzerland experienced $359 million in outflows, which analysts attributed to asset reallocations between providers rather than outright selling.

Bitcoin continued to dominate capital inflows, while Ethereum faced challenges. Bitcoin’s inflows brought its year-to-date total to $30.2 billion, whereas Ethereum saw $169 million in outflows, marking its first negative week in five, according to the Yahoo Finance report. Meanwhile, altcoins such as

and attracted $29.4 million and $84.3 million in new investments, respectively, as reported by TradingView.

Looking forward, the market remains highly responsive to signals from the Federal Reserve. If the Fear & Greed Index falls below 50 again, it could point to rising caution, while anticipation of further rate cuts may encourage more risk-taking. "Rallies driven by CPI data tend to be short-term," analysts cautioned, stressing the importance of prudent risk management, a sentiment previously echoed by Coinotag.