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Highlights
- Bitcoin ETFs inflows rise as institutional players position themselves ahead of Fed rate cuts.
- 105 of 107 economists surveyed expect the Fed to cut rates by 25 bps, and three rate cuts before 2025 end.
- Despite the rebound, Bitcoin ETFs are still trailing Gold ETFs, which continue to attract strong capital inflows as a macro hedge.
Inflows into spot Bitcoin ETFs are picking up pace once again, with an additional $642 million coming on Friday, September 12. Institutional players are positioning well ahead of the expected Fed rate cut next week, as BTC moves to catch up with the Gold rally ahead. BlackRock and Fidelity have contributed a lion’s share to most of the inflows this week.
Bitcoin ETF Inflows Surge Over $2.3 Billion This Week
Inflows across all US issuers of the spot BTC ETFs have surged to more than $2.3 billion over the past week. This bounce back comes ahead of the much-awaited rate cuts from US Federal Reserve, coming next week during the September FOMC meeting. On September 12, the inflows into spot ETFs for Bitcoin surged to $642 million, marking the largest daily inflow this week.
Furthermore, as per the data from Farside Investors, Fidelity’s FBTC led the most of the inflows at $315 million, followed by BlackRock’s IBIT at $264 million. Both – FBTC and IBIT shares – have gained more than 4% over the past week.
BlackRock’s iShares Bitcoin Trust (IBIT) saw net inflows of 2,270 BTC on September 12, equivalent to $264.58 million. The fund also registered $3.2 billion in daily trading volume, reinforcing its position as the leading U.S. spot Bitcoin ETF by market activity. Following the success of IBIT, BlackRock moves to tokenize IBIT ETF, as per the latest development.
Three Fed rate Cuts Expected Before 2025-end
Market analysts remain uncertain about how big the Fed rate cuts will be during the FOMC next week. While US President Donald Trump has demanded 100 bps rate cut, the broader market consensus stays around 25 bps.
A Reuters survey found that 105 of 107 economists expect the Federal Reserve to cut interest rates by 25 basis points to a range of 4.00%–4.25% at its September 17 meeting. Most respondents also project another cut in the following quarter, with up to three reductions likely by year-end.
Catching Up With Gold ETFs
With a massive 40% upside in the first eight months, Gold has dominated over Bitcoin by a wide margin. With the latest surge in inflows, Bitcoin ETFs are now trying to catch up with Gold ETFs.
Ecoinometrics reported that gold is outpacing Bitcoin in ETF inflows. Gold funds continue to attract capital as a hedge against macroeconomic uncertainty. Meanwhile, Bitcoin ETF flows have stalled over the past month.
As of now, the BTC price has been flirting with $115,000 levels. A breakout past $118,000 is essential for the bull run to continue. Despite the Fed rate cut expectations and risk-ON sentiment rising, the Gold rally has continued, on the other hand, amid expectations of a weakening US Dollar.
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