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Bitcoin ETFs are witnessing a record surge in inflows, and according to analysts, the momentum is far from over.
Experts point to several factors, including strong institutional demand, favorable market conditions, and increasing confidence in Bitcoin as an asset class—all of which are likely to fuel further growth in inflows.
Bitcoin ETFs saw net inflows of $2 billion last week, making it the third-largest inflow in history. Leading the pack was BlackRock’s (IBIT) ETF, which brought in $1 billion, followed by Fidelity’s (FBTC) ETF with $319 million in inflows. Ethereum also saw gains, with its spot ETF attracting $79 million, according to data from SoSo Value.
Speaking with Decrypt, Ryan Lee, Chief Analyst at Bitget Research said there have been six consecutive days of inflows, which is a strong signal of institutional interest. “The main drivers are Trump’s rising odds of winning the election and a technical rebound in Bitcoin’s price,” he explained.
QCP Capital echoed these sentiments, pointing out that Bitcoin ETFs closed last week with $203 million in inflows on Friday alone. The firm attributed this growth in part to the U.S. Securities and Exchange Commission (SEC) recently approving Bitcoin ETF options to be listed on the New York Stock Exchange (NYSE), a move that is expected to bring additional liquidity into the market.
“With the SEC’s approval of ETF options, we believe this will provide the ETF with the needed liquidity to attract sustainable inflows,” QCP Capital wrote.
One of the primary catalysts for continued inflows is the so-called “Trump Trade.”
Data from crypto prediction market Polymarket shows that Donald Trump is currently leading with 61.4% odds, compared to Vice President Kamala Harris’s 39%. Trump’s potential reelection has been viewed positively by market participants, as his administration has shown favorable attitudes toward cryptocurrencies.
“Trump is a known supporter of Bitcoin, and his increasing odds of winning are seen as a positive signal for the market,” said Lee. Trump’s comments at the Nashville Bitcoin Conference, where he encouraged people not to sell Bitcoin, have further fueled optimism among investors.
Lee also pointed out that Bitcoin recently bounced off the $58,000 support level, generating technical momentum for a price rebound, which has prompted additional fund moves into the asset.
Vijay Pravin Maharajan, CEO and Founder of bitsCrunch, told Decrypt that the market sentiment is becoming more favorable, as evidenced by the sharp rise in the Crypto Fear and Greed Index, which jumped from 38 to 72 in just a few weeks. That, he said, “suggests a strong appetite for risk assets, including Bitcoin.”
Maharajan also noted that geopolitical developments, such as the potential de-escalation of conflict in the Middle East, could further enhance positive market sentiment. He predicts that Bitcoin could break its previous all-time high of $73,850 as early as November and surpass $100,000 in the near future.
Meanwhile, in a note sent to Decrypt, Bernstein Research reinforced the idea that Bitcoin ETF inflows will continue to grow, noting that $2 billion in fresh purchases were made last week, bringing total year-to-date flows to $20.5 billion. With assets under management crossing $63 billion, Bernstein analysts believe that these inflows are increasingly leading to demand for Bitcoin in the spot market.
“Incremental ETF inflows are now leading to spot demand, as asset managers focus on distributing these products to wealth advisors and wirehouses,” Bernstein said. This shift from initial demand driven by hedge funds and arbitrage traders is expected to contribute to a more stable and sustained inflow into Bitcoin ETFs.
However, sounding a note of caution, Bitfinex analysts told Decrypt that the surge in inflows is part of a broader trend in Bitcoin’s increasing institutional adoption and expectations of a better regulatory environment after the upcoming US elections.
“However, we remain cautious, noting that inflows do not always lead to sustained price increases and previous attempts by BTC to break past the $70,000 level, accompanied by large ETF inflows, have failed. The historical volatility of Bitcoin prices suggests that further fluctuations may occur, despite the inflows boosting confidence in Bitcoin ETFs as a viable investment vehicle,” Bitfinex analysts said.
Edited by Stacy Elliott.