Key takeaways
- US Bitcoin ETFs saw the largest inflow since late July, with over $263 million in a single day.
- Bitcoin’s price surge coincides with huge investments in ETFs, peaking at over $60,000.
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Inflows into U.S. Bitcoin spot exchange-traded funds (ETFs) surged Friday, with net purchases topping $263 million, the largest single-day inflow since July 22. The strong performance came on the heels of a day that saw Bitcoin surge above $60,000, up 12% in a week, according to TradingView.
Investors poured about $102 million into Fidelity’s Bitcoin (FBTC), bringing the fund’s weekly gains to about $218 million, according to data from Farside Investors.
FBTC has made a strong comeback and taken the lead this week after suffering two consecutive weeks of negative results. During that period, approximately $467 million was withdrawn from the fund.
ARK Invest/21Shares’ Bitcoin fund (ARKB) followed FBTC, ending Friday with about $99 million in net capital. Other competing Bitcoin ETFs managed by Bitwise, Franklin Templeton, Valkyrie, VanEck, and Grayscale also saw positive inflows.
Meanwhile, BlackRock’s iShares Bitcoin Trust (IBIT), WisdomTree’s Bitcoin Fund (BTCW) and Grayscale’s Bitcoin Mini Trust (BTC) saw no inflows.
IBIT’s recent performance has been poor, with no inflows seen on almost every trading day over the past two weeks.
The fund even saw net outflows on two separate days during this period, on August 29 and September 9. Since its launch, IBIT has seen a total of three days of net outflows.
With Friday’s massive gains, U.S. spot Bitcoin ETFs closed the week with over $400 million in net inflows.
The positive sentiment extended beyond U.S. Bitcoin funds as the broader cryptocurrency market also had a green day. Bitcoin (BTC) surged from $54,300 on Monday to $60,600 yesterday. The flagship cryptocurrency is now hovering around $60,200, according to data from TradingView.
Ethereum (ETH) surged 8% to $2,400 in a week. Among the top 20 crypto assets, Toncoin (TON), Chainlink (LINK), and Avalanche (AVAX) saw the biggest gains, according to data from CoinGecko.
Bitcoin ETF Investors Are in the Red: ARK Invest
A recent report from ARK Invest shows that the average cost of U.S. spot Bitcoin ETF investors was above the current market price at the end of August. This indicates that the majority of these participants are currently underwater.
The flow-weighted average price used to calculate the cost basis indicates that investors who bought earlier may have bought at higher prices, compounding the negative impact of the recent price decline.
However, according to the MVRV Z-Score, a metric comparing Bitcoin’s market cap to its cost basis, Bitcoin’s fundamentals remain bullish, notes ARK Invest. Overall sentiment toward Bitcoin is still positive.
All eyes are on the Fed’s interest rate decision
The recent surge could be due to expectations of a rate cut by the Federal Reserve (Fed). Market participants are expecting a potential rate cut of 25 to 50 basis points at the Fed’s meeting next Wednesday, September 18.
This adjustment is supported by the recent inflation report, which came in at 2.5%, below expectations and on track to meet the Fed’s 2% target.
The global backdrop also reflects similar monetary easing, with the European Central Bank and the Bank of Canada recently cutting rates.
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