Bitcoin ETF Inflows Surge Past $850M as Fed Rate-Hike Bets Collapse

Institutional Money Returns to Bitcoin

U.S. spot Bitcoin ETFs experienced a week of renewed inflows, drawing $853.5 million across five consecutive trading sessions, according to SoSoValue data. BlackRock’s IBIT fund captured the lion’s share of capital flows, attracting approximately $690 million—representing roughly 80% of the week’s total inflows. This resurgence marks a sharp reversal from the prior week, which saw $61.5 million in net outflows, bringing cumulative inflows since launch to $52.18 billion.

Activity levels gradually subsided as the week progressed, with daily inflows declining from $128.7 million on Thursday to $98.9 million by Friday. The ETFs ended the week holding $79.5 billion in assets, comprising about 6.1% of Bitcoin’s total market capitalization. Friday saw IBIT pull in $86.7 million and Fidelity’s FBTC attract $41 million, though outflows from Invesco’s BTCO ($19.4 million) and VanEck’s HODL ($10.6 million) indicated mixed sentiment across fund issuers.

Weakening Employment and Fading Rate Fears Drive Momentum

The catalyst behind Bitcoin’s institutional appeal appears rooted in shifting macroeconomic expectations. U.S. employers cut 23,000 jobs in July, dramatically missing forecasts for a 95,000 gain, signaling potential labor market weakness. This softening prompted significant shifts in Federal Reserve expectations, with CME FedWatch odds for a September interest rate increase dropping to 40% from 55% by Friday, though recovering slightly to 46% by Monday. Tim Sun, senior researcher at HashKey, attributed the flows to portfolio rebalancing and basis trading activity, emphasizing that weaker employment data and falling rate-hike expectations represented more significant drivers than temporary cryptocurrency market dynamics.

Bitcoin’s price reflection of these trends showed modest recovery, trading around $65,100 on Monday morning, though still down 48% from its October 2025 peak. Analysts identified support levels at $60,000 to $61,000 that the market has repeatedly tested during recent weakness.

Mixed Signals on Trend Direction

Market experts offered divergent interpretations of the inflow momentum. James Butterfill, head of research at CoinShares, adopted an optimistic stance, suggesting cycle lows probably lie in the past and citing three consecutive weeks of whale accumulation that followed months of $40 billion in selling pressure. He projected Bitcoin potentially trading in a range-bound pattern for two to three months, potentially toward $80,000. Global digital asset investment products received $1.05 billion in the week, marking a fifth straight week of positive flows.

Tim Sun counseled caution, noting that current inflows appear insufficient to support a genuine trend reversal. He pointed to persistent elevation in long-dated Treasury yields and lingering rate-hike probabilities as concerns, suggesting the market remains fragile despite the week’s positive flows.

Returning institutional capital to Bitcoin as rate-hike expectations fade suggests the broader crypto market, including XRP, may be entering a more favorable macro environment.

Source: SoSoValue, via Decrypt. Not financial advice.