U.S. spot Bitcoin exchange-traded funds (ETFs) saw a significant turnaround on Thursday, attracting $221.7 million in net inflows, marking their largest single-day influx in approximately two months. This rebound puts an end to a troubling 10-day outflow streak that had drained around $2.7 billion from these funds, contributing to a dismal June, which recorded about $4.5 billion in outflows, the worst month for spot Bitcoin ETFs to date.
Leading this shift was Fidelity’s FBTC, which drew in $166 million, followed by ARKB with $91.8 million and VanEck’s HODL, which managed to secure a modest $4.4 million. However, not every fund experienced a positive turn, as BlackRock’s IBIT faced a $40.4 million outflow, continuing a downward trend that began in mid-June.
The sudden uptick in inflows can be attributed to a weaker-than-expected jobs report and a shift in the Federal Reserve’s stance, which eased some of the pressure on risk assets. The June jobs report revealed that only 57,000 nonfarm payrolls were added, far below the forecast of roughly 110,000. Additionally, Fed Chair Kevin Warsh indicated that inflation risks had lessened, which contributed to a cooling of expectations surrounding further interest rate hikes and subsequently weakened the U.S. dollar.
Andri Fauzan Adziima, research lead at Bitrue Research Institute, noted that Warsh’s comments bolstered overall market sentiment, helping to drive the Bitcoin rebound above $61,000 after it recently dipped below $58,000, the lowest level in 21 months. This positive shift in sentiment not only influenced Bitcoin but also began supporting inflows into Ethereum ETFs, which posted inflows of $14.9 million on Wednesday and $29.1 million on Thursday.
Tim Sun, senior researcher at HashKey, pointed out that the market’s previous persistent outflows reflected an anticipation of further rate increases, which in turn raised both the dollar and real yields against non-yielding assets like Bitcoin. With the weak payroll figures now dampening expectations for rate raises, Sun proposed that this could signal a shift in market dynamics.
However, caution is warranted, as Sun emphasized that this rebound might only be a temporary uplift in what has been a challenging market. He underscored that Bitcoin’s trajectory remains fundamentally linked to fluctuations in the U.S. dollar, real interest rates, and Federal Reserve policies.
Additionally, Stephen Wundke from Algoz Technologies observed that the current uptick could also be attributed to bargain-hunters taking advantage of oversold conditions. As investors flocked to perceived safe assets such as Treasury bills, the decline in both five-year yields and oil prices suggested inflation fears might be subsiding. Wundke noted that while Bitcoin might hover around its current low for the immediate future, the overall direction appears to be tilting upwards.
Market predictions, however, remain cautious. On the Myraid prediction market, users are maintaining a bearish outlook, estimating a 74% likelihood that Bitcoin’s next significant movement will be downward to $55,000 rather than upward to $84,000, a sentiment unchanged from the previous week.
