Key Points
- US Bitcoin ETFs have seen inflows of over $263 million in a single day, the most since late July.
- Bitcoin price rises to $60,000 amid huge ETF investment
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Inflows into U.S. spot Bitcoin exchange-traded funds (ETFs) surged on Friday, pushing net buying to $263 million, the largest single-day inflow since July 22. The strong performance came on a day when Bitcoin broke $60,000, according to TradingView, and the cryptocurrency is up 12% in a week.
According to data from Farside Investors, investors have invested about $102 million in Fidelity’s Bitcoin (FBTC), which has resulted in a weekly return of about $218 million for the fund.
FBTC led the group this week after a strong comeback that saw two consecutive weeks of poor performance, during which about $467 million was pulled out of the fund.
ARK Invest/21Shares’ Bitcoin Fund (ARKB) closed Friday with net capital of about $99 million, following FBTC. Other competing Bitcoin ETFs managed by Bitwise, Franklin Templeton, Valkyrie, VanEck, and Grayscale also experienced positive inflows.
Meanwhile, BlackRock’s iShares Bitcoin Trust (IBIT), WisdomTree’s Bitcoin Fund (BTCW), and Grayscale’s Bitcoin Mini Trust (BTC) saw no inflows at all.
IBIT’s recent performance has been lackluster, with no inflows observed on almost every trading day over the past two weeks.
The fund experienced net outflows on two days, August 29 and September 9. Since its launch, IBIT has recorded net outflows on a total of three days.
Fueled by Friday’s massive rally, U.S. spot Bitcoin ETFs ended the week with net inflows of more than $400 million.
The positive sentiment extended beyond the US Bitcoin fund, and the broader cryptocurrency market also experienced a green day. Bitcoin (BTC) surged from $54,300 on Monday to $60,600 yesterday. According to TradingView data, the leading cryptocurrency is currently settling at $60,200.
Ethereum (ETH) has risen 8% in a week to $2,400. Among the top 20 cryptocurrencies, Toncoin (TON), Chainlink (LINK), and Avalanche (AVAX) have recorded the biggest gains, according to data from CoinGecko.
Bitcoin ETF Investors in the Red: ARK Invest
According to a recent report from ARK Invest, the average cost basis for U.S. spot Bitcoin ETF investors was above the market price as of the end of August, indicating that most of these participants are currently underwater.
The flow-weighted average price used to calculate the cost basis indicates that investors who bought early may have purchased at higher prices, which may further exacerbate the negative impact of recent price declines.
However, Bitcoin’s fundamentals remain bullish, according to ARK Invest’s MVRV Z-Score, a metric that compares Bitcoin’s market cap to its cost basis. Overall sentiment toward Bitcoin remains positive.
All eyes on the Fed’s interest rate decision
The recent surge may be due to expectations of a rate cut by the Federal Reserve. Market participants expect a rate cut of 25-50 basis points at the Fed’s September 18 meeting next Wednesday.
This adjustment is supported by the recent inflation report, which came in below expectations at 2.5% and well within the Fed’s 2% target.
The global economic situation also reflects similar easing policies, with the European Central Bank and the Bank of Canada recently cutting interest rates.
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