Bitcoin ETFs Record Strongest Inflows Since July, Push Holdings to New High
Bitcoin exchange-traded products (ETPs) globally saw a net inflow of 20,685 BTC last week, marking the strongest weekly intake since July 22, according to digital assets firm K33 Research. This surge in demand has lifted U.S. spot Bitcoin ETFs' combined holdings to 1.32 million BTC, surpassing the previous peak set on July 30.
U.S. Bitcoin ETF products contributed nearly 97% of these inflows, highlighting a significant increase in investor appetite ahead of the FOMC meeting. André Dragosch, head of research for Europe at Bitwise Investments, emphasized that Bitcoin ETF inflows are a key determinant of Bitcoin's performance, with their explanatory power reaching an all-time high.
There appears to be a 're-rotation' from Ethereum back to Bitcoin in terms of investor flows, as flows into Bitcoin ETFs have surpassed new supply growth by a factor of 8.93 times. This imbalance acts as a key tailwind for Bitcoin's recent strength.
Analysts at K33 agree that flows have been a primary driver of Bitcoin's resilience since ETF approvals last year, and the latest surge signals accelerating demand that could support further price gains. Over the last 30 days, investors accumulated approximately 22,853 BTC through various products, outpacing the new supply of 14,056 BTC.
Fidelity’s FBTC product was a major contributor, with an $843 million net inflow representing 36% of the total $2.34 billion across all funds, hitting an 18-month high. The rise in risk appetite is driven by soft inflation data, rate cut expectations, and a flurry of major crypto-related IPOs and announcements last week.
However, despite these positive inflows, trading activity remains tepid, and volatility is historically low. Bitcoin's seven-day volatility dropped to yearly lows of less than 0.7% last week before rising modestly as prices climbed above $115,000. This marks 11 consecutive days of below 1.3% volatility, the second-longest stretch this year.
Implied volatility, which gauges future market expectations via options data, is also near multi-year lows. With muted trading, high offshore leverage, and no major immediate catalysts beyond the FOMC meeting, directional signals for Bitcoin are mixed, suggesting a cautious outlook in the short term.
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