Last week saw Bitcoin ETFs attract $2.3 billion, indicating a strong demand trend.
In the world of cryptocurrency, a significant development has taken place over the past week. US spot Bitcoin exchange-traded funds (ETFs) have pulled in approximately $2.3 billion, marking the highest weekly inflows since mid-July. This surge in Bitcoin ETF inflows could be a sign of a long-term trend in institutional interest in Bitcoin.
Wesley Crook, CEO of blockchain engineering firm FP Block, attributes much of the activity to expectations of rate cuts and the broader trend of enterprises entering the market. The US Federal Reserve is expected to cut rates at its next meeting this week, with a 88% chance according to prediction market Myriad.
Farbod Sadeghian, founder of TheBlock., notes that structural demand is the real story driving Bitcoin ETF inflows. According to Sadeghian, the ETF wrapper makes it easier and safer to access Bitcoin, but the underlying appetite is clearly about exposure to the asset itself. He further states that investors, especially at the institutional level, now see Bitcoin as an allocation worth holding over the long term.
Georgii Verbitskii, a derivatives trader and founder of decentralized protocol TYMIO, sees last week's inflows as a "clear demand impulse" that could be the beginning of a new uptrend. Verbitskii also points out that September to October marks "the start of the business season," and this "often sets the tone for trends that play out through the end of the year."
BlackRock's iShares Bitcoin Trust led with over $1 billion of inflows, while Fidelity's Wise Origin Bitcoin Fund brought in nearly $850 million. Other issuers, including Ark Invest and Bitwise, also posted gains, though smaller. Major crypto custody providers such as Coinbase hold custody for over 80% of crypto ETF issuers, facilitating institutional flow management.
At the time of writing, Bitcoin is changing hands at around $114,600, according to CoinGecko data. Bitcoin's price recovered above $115,000, reinforcing investor optimism. Crook also expects the momentum to likely continue as institutional allocations for Bitcoin bring "upward pressure on prices."
Sadeghian's comments suggest that the Bitcoin ETF inflows are driven by more than just temporary rate cut expectations. He states that while rate cut expectations could provide a friendlier backdrop for risk assets, the bigger factor is the long-term demand for Bitcoin from institutional investors.
As the business season unfolds, it will be interesting to see how the Bitcoin ETF inflows stabilize and scale further over macro-driven momentum. The integration of Bitcoin ETFs into standard portfolios could potentially solidify Bitcoin's position as a viable investment option for institutions.
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