Bitcoin ETFs See Strong Inflow, Reversing Recent Outflows
U.S. spot Bitcoin exchange-traded funds (ETFs) recorded inflows of $526.7 million on Monday, marking their most significant single-day gain since September 22. This surge follows a two-week period of net outflows totaling approximately $910 million, including a substantial $484.9 million exit on October 7, which was the worst day for the funds since June. Friday had closed with another $82.4 million in net selling, making Monday’s turnaround particularly sharp.
BlackRock Leads Bitcoin ETF Gains Amid Mixed Crypto Fund Performance
BlackRock’s iShares Bitcoin Trust (IBIT) was the primary driver of Monday’s inflows, bringing in $665.2 million, an amount that surpassed the total net inflow for all Bitcoin ETFs. In contrast, Fidelity’s FBTC saw outflows of $83.6 million, and Grayscale’s GBTC experienced a $54.9 million departure. Other Bitcoin ETFs reported no significant flows.
Meanwhile, other cryptocurrency ETFs moved in the opposite direction. Spot Ethereum ETFs experienced outflows of $103 million on Monday, marking their fourth consecutive day of declines. Solana ETFs also saw outflows, losing $6.7 million. Despite these losses in Ethereum and Solana funds, Bitcoin, Ethereum, and Solana ETFs collectively attracted around $417 million. BlackRock’s influence was also evident in the Ethereum ETF market, with its ETHA fund accounting for $95.4 million of the Ethereum outflows on the same day IBIT saw substantial inflows.
Bitcoin Price Nears Investor Cost Basis Amid Broader Market Factors
Bitcoin traded around $82,000 on Monday, nearing the estimated average cost basis of $82,300 for ETF holders, as calculated by Nexo analyst Iliya Kalchev last week. This proximity suggests that the average investor is currently near breakeven.
The broader market was influenced by rising oil prices, with Brent crude trading between $108 and $110 a barrel following weekend attacks on Persian Gulf tankers. Higher oil prices can lead to increased transportation costs, impacting consumer prices. This effect is reflected in the consumer price index, which rose 3.7% in the 12 months through September, with the energy index up 20.4%. Persistent inflation continues to influence the Federal Reserve’s monetary policy, with expectations of further rate hikes following a quarter-point increase in September.
Rising interest rates typically push up Treasury yields. The 10-year Treasury yield remained above 5% on Monday, according to Treasury data, while the 30-year yield touched approximately 5.7% on October 7, the same day as the significant Bitcoin ETF outflow. As Bitcoin does not offer a yield, Treasury bonds with yields exceeding 5% and lower price risk present a competitive alternative for investor capital. The $261.4 million that exited Bitcoin ETFs on October 14 coincided with the release of the September CPI report.
U.S. spot Bitcoin ETFs are currently down approximately $88 million for October, with nine trading sessions remaining before the Federal Reserve’s meeting on October 27-28.
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