US Bitcoin exchange-traded funds (ETFs) saw their largest single-day inflow since late July, with net investments surpassing $263 million. This significant uptick in ETF inflows coincided with Bitcoin’s price soaring above $60,000, marking a notable 12% increase within a week, according to Trading View.

Major Inflows Highlight Recovery Trend

Among the standout performers, Fidelity’s Bitcoin Fund (FBTC) led the pack with an impressive $102 million inflow. This boost has brought the fund’s weekly gains to approximately $218 million, showcasing a strong recovery after experiencing two consecutive weeks of negative performance, during which about $467 million was withdrawn.

ARK Invest/21Shares’ Bitcoin Fund (ARKB) also saw substantial gains, ending Friday with around $99 million in net capital. Other Bitcoin ETFs managed by Bitwise, Franklin Templeton, Valkyrie, Van Eck, and Grayscale recorded positive inflows as well, reflecting a broader trend of increased investor interest.

In contrast, several notable Bitcoin ETFs, including BlackRock’s iShares Bitcoin Trust (IBIT), WisdomTree’s Bitcoin Fund (BTCW), and Grayscale’s Bitcoin Mini Trust (BTC), saw no inflows. IBIT, in particular, has struggled recently, with no new inflows observed on almost every trading day over the past two weeks and net outflows on August 29 and September 9. With Friday’s substantial gains, US spot Bitcoin ETFs closed the week with over $400 million in net inflows, indicating a robust rebound in investor sentiment.

Bitcoin’s Price Surge and Broader Market Trends

The surge in ETF investments mirrored Bitcoin’s impressive price increase. From a price of $54,300 on Monday, Bitcoin jumped to $60,600 by Friday, settling around $60,200, according to Trading View data. Ethereum (ETH) also saw a notable rise, jumping 8% to $2,400 within the same week. Among the top 20 cryptocurrencies, Toncoin (TON), Chainlink (LINK), and Avalanche (AVAX) recorded the highest gains, as reported by Coin Gecko.

Insights from ARK Invest on Investor Performance

A recent report from ARK Invest reveals that the average cost basis for US spot Bitcoin ETF investors is currently above the market price. This suggests that many investors who entered the market earlier may be experiencing losses, exacerbated by recent price declines.

However, despite these challenges, ARK Invest’s MVRV Z-Score—a metric comparing Bitcoin’s market capitalization to its cost basis—indicates that Bitcoin’s fundamentals remain strong. The overall sentiment towards Bitcoin remains positive, suggesting that the long-term outlook for the cryptocurrency is still favorable.

The Fed’s Upcoming Decision and Market Impact

The recent surge in Bitcoin prices and ETF inflows may be influenced by market expectations of a Federal Reserve (Fed) interest rate cut. Participants are anticipating a potential reduction of 25-50 basis points in the upcoming Fed meeting on September 18. This expectation is supported by the latest inflation report, which showed a 2.5% rate, below expectations and approaching the Fed’s 2% target.

Globally, monetary easing trends are also apparent, with both the European Central Bank and the Bank of Canada recently lowering their rates. These global economic adjustments may contribute to the positive market sentiment surrounding Bitcoin and other cryptocurrencies.

Conclusion

The substantial inflow into US Bitcoin ETFs and Bitcoin’s climb above $60,000 underscore a robust recovery and growing investor confidence. While challenges remain for some ETF investors, the broader market trend and expectations of favorable monetary policies suggest a promising outlook for Bitcoin and its related investments. As always, investors should stay informed about market developments and global economic conditions that may impact future performance.