Bitcoin and Ethereum Rally on Japan ETF News and Lower Inflation

Bitcoin and Ethereum saw a sharp price jump this week following encouraging economic data from the United States. Lower than expected inflation figures helped calm concerns about interest rate hikes, giving investors the green light to move back into risk assets. Bitcoin briefly touched $65,000 as capital flowed back into U.S. spot ETFs, with BlackRock leading the charge in total inflows.

Japan is also making headlines as a new bill to legalize Bitcoin ETFs cleared a committee in the Upper House. If this legislation passes, it would reclassify crypto as a financial instrument and lower taxes to a flat 20 percent. This potential framework could bring spot Bitcoin ETFs to the Tokyo Stock Exchange by 2027, marking a major shift in how one of the world's largest economies handles digital assets.

Ethereum is showing particular strength, managing to outperform Bitcoin as its own ETF flows turn positive. Renewed institutional interest, combined with positive technical setups, has traders watching the $1,900 level for further gains. Morgan Stanley filings involving Ethereum and Solana also added to the positive sentiment surrounding regulated investment products.

Investors are now looking toward upcoming economic reports and legislative progress in Japan to see if this momentum can last. With institutional demand returning and the regulatory environment slowly warming up, the market seems to be finding its footing after weeks of sideways trading.