U.S. spot Bitcoin exchange-traded funds (ETFs) experienced a remarkable inflow of $368.25 million, marking the highest single-day increase in a month and reversing a trend of previous outflows. This surge in investment signals a revival of institutional confidence in Bitcoin, as all twelve spot Bitcoin ETFs registered net inflows on Monday, according to data compiled by SoSoValue.
Fidelity’s FBTC led the charge with a substantial net inflow of $156.50 million, followed by Ark Invest and 21 Shares’ ARKB, which attracted $89.47 million. These developments are occurring in anticipation of crucial macroeconomic reports slated for release this week, including revisions to the Nonfarm Payrolls, the Producer Price Index, and the Consumer Price Index—all of which are likely to influence the Federal Reserve’s imminent interest rate decision.
Experts have pointed to the significance of the upcoming inflation report, which is expected to play a critical role in shaping market perceptions and the Federal Reserve’s potential moves, particularly the anticipated decision on September 17. According to Illia Otychenko, lead analyst at CEX.IO, the current capital flows reflect a strategic repositioning by investors ahead of this key Federal Reserve meeting. While a modest quarter-point rate cut was initially expected, mounting speculation surrounding a possible half-point reduction has generated heightened interest in the cryptocurrency sector.
In stark contrast to the bullish trend in Bitcoin, Ethereum ETFs demonstrated a negative net flow of $96.69 million, marking the sixth consecutive day of outflows. Otychenko noted a capital rotation pattern, indicating that funds are shifting preference from Ethereum back to Bitcoin. He explained this shift as investors who previously pursued Ethereum’s higher upside in stronger market conditions are now turning to Bitcoin as a more secure option amidst looming uncertainties.
Despite the shift in investor sentiment, both Bitcoin and Ethereum saw a notable increase in short-dated implied volatility, surging by 15% over the weekend. This uptick suggests that options traders are preparing for potential significant movements in the market in the coming days.
As of the latest data, Bitcoin is trading at approximately $112,654, reflecting a 0.8% increase on the day, while Ethereum is priced at around $4,348, up 1.1% in the past 24 hours, according to CoinGecko. The renewed institutional interest in Bitcoin, coupled with the shifting dynamics between Bitcoin and Ethereum, paints a complex picture of the current cryptocurrency landscape as investors navigate upcoming economic indicators and the Federal Reserve’s monetary policy decisions.
