Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
Spot Bitcoin exchange-traded funds (ETFs) concluded a six-day streak of net outflows on Monday, recording a significant $219 million in daily inflows. This rebound was primarily driven by strong performances from Fidelity’s Wise Origin Bitcoin Fund (FBTC) and BlackRock’s iShares Bitcoin Trust (IBIT), signaling a potential shift in investor sentiment after a period of market correction.
The positive inflows mark a notable change, according to data from ETF platform SoSoValue. The preceding six trading days had seen consistent net outflows from spot Bitcoin ETFs, starting on August 15 and extending through the end of last week.
During this outflow streak, the largest single-day exodus occurred on August 19, with $523.31 million exiting the funds, followed by another substantial outflow of $311.57 million on Wednesday.
These outflows coincided with a broader Bitcoin market correction, which followed the asset reaching new all-time highs. CoinGecko data indicated that Bitcoin hit a peak of $124,128 on August 14 before experiencing an 11% drop to $110,186.
Leading the Rebound
Fidelity and BlackRock’s offerings were instrumental in reversing the outflow trend on Monday. Fidelity’s FBTC led the pack, attracting $65.56 million in inflows, while BlackRock’s IBIT was close behind with $63.38 million.
ARK Invest’s ARK 21Shares Bitcoin ETF (ARKB) also contributed significantly to the positive day, adding $61.21 million. Other issuers, including Bitwise’s BITB, Grayscale’s Bitcoin Trust (GBTC), and VanEck’s HODL fund, saw smaller yet positive contributions of $15.18 million, $7.35 million, and $6.32 million, respectively.
Shifting Market Sentiment
James Butterfill, head of research at CoinShares, commented on the broader context, noting that the recent crypto fund outflows represented their largest losses since March. Butterfill attributed this sell-off to “increasingly polarized” investor sentiment regarding U.S. monetary policy, which he said drove $2 billion in outflows.
However, Butterfill observed a shift in sentiment following United States Federal Reserve Chair Jerome Powell’s recent address. Powell’s remarks were widely interpreted as “more dovish than expected,” which helped alleviate market pessimism.
This change in outlook was reinforced by speculation of a possible rate cut in September, leading to a surge in the crypto market. Consequently, the Crypto Fear & Greed Index, a key metric for market sentiment, rose to a “Greed” score of 60, indicating a renewed appetite for risk among market participants.
The return to net inflows for spot Bitcoin ETFs marks a positive development, reflecting an improving sentiment across the broader cryptocurrency market. This shift appears to be influenced by evolving interpretations of the Federal Reserve’s monetary policy outlook.
