Summary
- On Thursday, U.S. spot Bitcoin ETFs experienced inflows of $221.7 million, marking their highest daily intake in nearly two months and breaking a 10-day streak of outflows.
- This outflow period saw approximately $2.7 billion withdrawn from these funds, making June the worst month ever recorded for them, with total outflows around $4.5 billion.
- Fidelity's FBTC was the top performer with $166 million, while BlackRock's IBIT saw a $40 million outflow, continuing its decline.
After a 10-day period of losses, U.S. spot Bitcoin ETFs returned to positive inflows on Thursday, driven by a disappointing jobs report and more lenient signals from the Federal Reserve regarding interest rates.
The funds attracted $221.7 million, the largest influx in about two months, as reported by SoSoValue. Fidelity's FBTC led the inflow with $166 million, followed by ARKB at $91.8 million and VanEck's HODL at $4.4 million. In contrast, BlackRock's IBIT saw a decline of $40.4 million, continuing its losing streak since mid-June.
This influx ended a period that saw approximately $2.7 billion withdrawn from the funds, concluding a dismal June that was the worst month on record for U.S. spot Bitcoin ETFs, which experienced outflows totaling about $4.5 billion. Earlier this week, Bitcoin had dipped to a 21-month low below $58,000 but has since risen back above $61,000, as per CoinGecko data.
Shifts in Rate Expectations
The recent inflow was sparked by a softer economic report and a change in the Federal Reserve's stance. The June jobs report indicated only 57,000 new nonfarm payrolls, significantly lower than the anticipated 110,000, while Fed Chair Kevin Warsh noted a decrease in inflation risks, which tempered expectations for further rate hikes and weakened the dollar's strength.
According to Andri Fauzan Adziima, research lead at Bitrue Research Institute, Warsh's comments "improved overall market sentiment," leading to increased inflows into Bitcoin ETFs and contributing to Bitcoin’s rise above $61,000. He added that this positive shift is also benefiting Ethereum ETFs, which recorded inflows of $14.9 million on Wednesday and $29.1 million on Thursday, per SoSoValue.
Tim Sun, senior researcher at HashKey, linked the change to a "marginal shift in interest rate expectations." He noted that the persistent outflows reflected the market's anticipation of additional rate hikes, which had strengthened the dollar and increased real yields against non-yielding Bitcoin. The weak jobs report has since diminished expectations for more rate hikes.
Still Cautious on Trend Reversal
Sun warned that the recent uptick is merely a "temporary recovery following the easing of interest rate pressures,” and a definitive trend reversal has not been confirmed. He stated that Bitcoin's trajectory remains influenced by fluctuations in the U.S. dollar, real interest rates, and Federal Reserve policies.
Stephen Wundke, strategy and revenue director at Algoz Technologies, observed that bargain-hunters are now purchasing undervalued assets after a flight to safety that even affected gold, as investors sought refuge in Treasury bills. He noted that declining five-year yields and oil prices suggest inflation is becoming more manageable, while those investors searching for a Bitcoin bottom or recognizing oversold assets began to buy in. Wundke predicted that Bitcoin might "fluctuate around the bottom for a few more weeks," but emphasized that the overall direction is becoming clearer.
On the prediction market Myraid, which is owned by Decrypt's parent company Dastan, users remain pessimistic about the market's direction. They estimate a 74% probability that Bitcoin's next move will lead it to $55,000 rather than $84,000, a sentiment consistent with last week's predictions.