Bitcoin surged to a two-week high, crossing the $114,000 threshold Thursday morning, marking a significant rebound from its low of $110,714 earlier in the week. This uptick reflects a growing interest in U.S. spot Bitcoin ETFs, which saw impressive inflows of $757.1 million on Wednesday—an increase that represents the highest level in eight weeks.
According to data from SoSoValue, the overall accumulation of Bitcoin within U.S. ETFs reached $1.39 billion throughout September. The recent inflows have been attributed to favorable developments in inflation metrics, notably the Producer Price Index (PPI), which exceeded market expectations, further spurring interest in Bitcoin investments.
DarkFrost, a verified analyst at CryptoQuant, remarked on the positive sentiment surrounding Bitcoin’s price movements. He highlighted that the latest increase was accompanied by a 6.60% rise in open interest, reaching $43.3 billion, along with optimistic funding rates, indicating strengthened market confidence.
In contrast to Bitcoin’s influx, Ethereum funds have faced a downturn, experiencing a negative net flow of $668.72 million this month, as reported by SoSoValue. Illia Otychenko, a lead analyst at CEX.IO, described this trend as a “capital rotation pattern,” suggesting a shift in investor focus from Ether back to Bitcoin, particularly in anticipation of an upcoming rate cut by the Federal Reserve scheduled for September 17.
The Fed has been under increasing pressure to adjust interest rates following disappointing job data releases over July and August. Although core inflation remains above 3%, the conflicting economic signals have led investors to speculate on larger-than-expected rate cuts. With a quarter-point reduction almost anticipated, market sentiment hints at the possibility of a more substantial half-point cut, which may be fueling the current surge in ETF inflows for Bitcoin, as noted by Stephen Gregory, founder of the crypto trading platform Vtrader.
According to the CME’s FedWatch tool, there is a 92% probability of a 25 basis point rate cut, while Myriad users assign an 80% likelihood to this scenario, reflecting a strong expectation among market participants for the Fed to take action to stimulate the economy. The environment suggests a readiness for potentially more aggressive monetary policy, which could further bolster Bitcoin’s appeal as an investment asset.
