Bitcoin ETFs Set a New Milestone with Strongest Inflows Since July
In a significant boost for the crypto market, Bitcoin exchange-traded products (ETPs) recorded net inflows of 20,685 BTC last week, according to data from K33 Research. This marks the strongest weekly gain since July 22. The renewed investor momentum pushed U.S. spot Bitcoin ETFs’ combined holdings to an impressive 1.32 million BTC, breaking the prior high set on July 30.
Strong Demand Ahead of Key Market Events
U.S.-based Bitcoin ETFs were the primary drivers of this influx, contributing a remarkable 97% of the total inflows. Analysts attribute the surge to heightened demand fueled by favorable market factors, including expectations of rate cuts and major crypto IPO announcements. According to AndrĂ© Dragosch, head of research for Europe at Bitwise Investments, “Bitcoin ETF flows are now one of the most significant determinants of Bitcoin’s price movements, reaching historic importance in explaining its performance.”
Shift in Investor Focus from Ethereum to Bitcoin
Compared to Ethereum ETFs, data from Bitwise suggest a notable “re-rotation” back to Bitcoin, as evident in recent fund flows. Over the past week, Bitcoin ETF inflows surpassed new Bitcoin supply by 8.93 times, highlighting strong institutional appetite. In the last 30 days alone, investors amassed 22,853 BTC globally via ETFs and related products, surpassing the newly minted supply of 14,056 BTC during the same timeframe.
Leading the Charge: Fidelity’s FBTC
Fidelity’s FBTC product captured a substantial portion of last week’s activity, contributing $843 million in net inflows. This accounts for 36% of the total funds flowing into Bitcoin ETFs worldwide, marking an 18-month high. Such steady demand underscores institutional investors’ confidence in Bitcoin as a long-term asset class, particularly in a market environment characterized by muted volatility.
Bitcoin Volatility Remains Historically Low
Though inflows suggest rising demand, analyses from K33 Research point to subdued market activity. Bitcoin’s seven-day volatility fell to yearly lows, averaging less than 0.7% last week. Implied volatility, a key metric that captures market expectations reflected in options pricing, also hovers near multi-year lows. With limited short-term catalysts, including Wednesday’s FOMC meeting, analysts suggest mixed directional signals for Bitcoin in the near term.
Looking Forward
The impressive inflows into Bitcoin ETFs reflect growing institutional confidence, supported by robust rate cut expectations and market developments. As investors rotate back to Bitcoin from Ethereum, the crypto giant may further consolidate its position as a dominant asset within the digital currency ecosystem. For those interested in capitalizing on these trends, products such as Fidelity’s FBTC offer accessible entry points for investing in Bitcoin via ETFs.
