Bitcoin ETFs Witness Remarkable Inflows Despite Ethereum Outflows
By: Eliza Bennet
In a significant turn of events, Bitcoin exchange-traded funds (ETFs) listed in the United States witnessed a notable influx of investments, amounting to nearly $2 billion in September. This surge in investment flows follows a challenging August during which these funds experienced substantial redemptions. Data from SoSoValue reveals that 12 Bitcoin ETF products experienced consistent inflows in six of the first eight trading sessions of September. The inflows accelerated over the final four sessions, drawing approximately $1.7 billion and indicating a renewed investor appetite for Bitcoin.
This substantial shift in investor sentiment has created a stark contrast with Ethereum, the second-largest cryptocurrency by market capitalization. While Bitcoin ETFs saw increased inflows, Ethereum investment vehicles recorded over $550 million in outflows during the same period. Industry expert, Nick Forster, founder of Derive, noted that this divergence reflects a shift in sentiment from Ethereum back to Bitcoin, with institutional investors rebalancing their portfolios towards Bitcoin.
The growing importance of Bitcoin ETFs in shaping the cryptocurrency's price trajectory has become evident recently. According to André Dragosch, head of research at Bitwise Europe, the daily net ETF flows now play a vital role in determining Bitcoin's market direction. Dragosch highlighted that since the US regulators approved the first spot products, the correlation between daily net flows and Bitcoin's subsequent returns has significantly increased, pointing to the institutionalized demand for Bitcoin. This trend has played a pivotal role in Bitcoin's recent price performance and market liquidity.
In parallel, spot Bitcoin ETFs recently pulled in $642 million, while Ether ETFs managed to attract $405 million on a single day amid rising institutional demand. This marks the fifth consecutive day of gains for Bitcoin ETFs, with Fidelity's FBTC and BlackRock's IBIT being the frontrunners in attracting fresh capital. Trading volumes in the Bitcoin ETF space topped $3.89 billion, reflecting robust activity and growing institutional confidence in cryptocurrency markets.
