U.S. spot Bitcoin exchange-traded funds (ETFs) experienced a significant turnaround on Thursday, registering net inflows of $221.7 million, marking the largest daily influx in approximately two months. This positive shift comes after a challenging 10-day period of outflows and aligns with a lackluster jobs report and softer signals from the Federal Reserve, which have collectively eased pressure on risk assets.
Leading the inflows was Fidelity’s FBTC, which attracted $166 million. ARKB followed closely with $91.8 million, while VanEck’s HODL secured $4.4 million. Conversely, BlackRock’s IBIT faced net outflows, shedding $40.4 million, continuing a downward trend that began in mid-June.
The recent inflows marked a crucial moment, particularly after a harrowing stretch that saw approximately $2.7 billion exit these funds. June, in particular, was historic for U.S. spot Bitcoin ETFs, recording the largest outflow at about $4.5 billion, with Bitcoin itself plummeting to a 21-month low below $58,000 earlier in the week. However, recent days have seen Bitcoin climb back above the $61,000 mark, according to CoinGecko data.
Several factors contributed to this turnaround. The June jobs report from the government revealed only 57,000 nonfarm payrolls were added, significantly underperforming the anticipated 110,000. Additionally, Federal Reserve Chair Kevin Warsh indicated that inflation risks had subsided, which tempered expectations for further rate increases and led to a weakening of the dollar.
Andri Fauzan Adziima, research lead at Bitrue Research Institute, noted that Warsh’s comments improved market sentiment, resulting in increased inflows to Bitcoin ETFs and supporting Bitcoin’s recovery. The momentum seemed to extend beyond Bitcoin as Ethereum ETFs also witnessed renewed interest, with inflows of $14.9 million on Wednesday and $29.1 million on Thursday.
Tim Sun, a senior researcher at HashKey, suggested that the recent shift in interest rate expectations played a significant role in this recovery. Persistent outflows had previously indicated market apprehension regarding additional rate hikes, affecting Bitcoin negatively as the dollar and real yields gained strength against it. However, the recent weak payroll data has tempered speculation about impending rate hikes.
Despite the encouraging rebound, experts caution against overoptimism. Sun described the bounce as a “temporary recovery” and emphasized that a definitive trend reversal has yet to be confirmed. He noted that Bitcoin’s trajectory remains influenced by fluctuations in the U.S. dollar, real interest rates, and Federal Reserve strategies.
Stephen Wundke, strategy and revenue director at Algoz Technologies, observed a trend of bargain-hunters stepping in to acquire oversold assets in the wake of a market flight to safety that even impacted gold, as investors sought refuge in Treasury bills. He pointed to declining five-year yields and oil prices as indicators of potentially waning inflation and suggested that while Bitcoin might remain volatile near its lows, the overall trajectory is becoming clearer.
As for market sentiment surrounding Bitcoin’s future price movements, users on the prediction platform Myraid, owned by Decrypt’s parent company Dastan, maintain a bearish outlook, assigning a 74% probability to the likelihood of Bitcoin falling to $55,000 rather than rising to $84,000—an outlook that remains unchanged from a week prior.
