Bitcoin's price held largely steady on Wednesday after fresh data showed that U.S. inflation remained subdued.

The largest cryptocurrency by market capitalization recently traded at $63,863, barely moving over a 24-hour period. Over the past week, Bitcoin has also been essentially flat.

The core consumer price index (CPI), which strips out the often-volatile food and energy categories, rose 0.2% from the prior month and climbed 2.5% year-over-year — the slowest annual pace since March 2021. Energy and gas prices declined for a second consecutive month, while grocery prices dropped for the first time since March, according to the report.

The softer inflation reading reduces pressure on Federal Reserve Chairman Kevin Warsh to raise interest rates at the central bank's September meeting. While the latest figures represent progress, core inflation remains above the Federal Reserve's long-standing 2% target — a gap that has kept policymakers cautious even as price pressures gradually ease. Lower inflation data smooths the path toward potential rate cuts, and reduced borrowing costs decrease the opportunity cost of holding a non-yielding asset like Bitcoin. Historically, Bitcoin has performed well in low-interest-rate environments.

Persistent inflation in the world's largest economy has prompted the Federal Reserve to maintain a cautious stance on interest rates. Despite Wednesday's encouraging data, consumer prices remain higher than a year ago, and U.S. wage growth has not kept pace.

Bitcoin has experienced heightened volatility since the United States and Israel launched attacks against Iran in February, with the cryptocurrency falling sharply on the initial reports of military conflict. Bitcoin is now down nearly 30% year-to-date.

Nevertheless, investors have demonstrated a growing appetite for the asset in recent weeks. U.S. spot Bitcoin exchange-traded funds recorded their largest inflows since April last week, a signal that institutional capital is returning to the asset even as geopolitical uncertainty and regulatory delays persist. The inflow surge followed several months of uneven ETF demand after the products launched earlier in the year. This renewed appetite has come even as the crypto industry weathered negative developments. A major security exploit targeting Coldcard Bitcoin hardware wallets last month unsettled crypto investors, and a vote on the long-awaited digital asset market structure legislation, the Clarity Act, has been postponed.

This article first appeared on Bitcoin Magazine and was written by Mathew Di Salvo.