Bitcoin ETFs Hit $20B Milestone in Net Flows Despite Price Downtrend

The United States spot Bitcoin exchange-traded funds (ETFs) have reached a significant milestone in net inflows despite Bitcoin’s ongoing seven-month price downtrend.

Bitcoin ETFs have crossed $20b in total net flows (the most imp number, most difficult metric to grow in ETF world) for first time after huge week of $1.5b. For context, it took gold ETFs about 5yrs to reach same number. Total assets now $65b, also a high water mark. pic.twitter.com/edldEimfqd

— Eric Balchunas (@EricBalchunas) October 17, 2024

Recent on-chain data has shown that US-based spot Bitcoin ETFs surpassed $20 billion in total net inflows, marking a significant achievement. According to Eric Balchunas, a senior ETF analyst at Bloomberg, this figure represents the “most difficult metric to grow” for ETFs.

Improved Market Conditions

Balchunas attributed the $20 billion milestone to a $1.5 billion inflow in the past week, a significant shift from earlier weeks that experienced outflows and negative sentiment. Improved market conditions have increased interest in Bitcoin ETFs, resulting in higher inflows for the sector.

It took US spot Bitcoin ETFs only ten months to reach the $20 billion net inflow threshold, reflecting robust investor interest. By comparison, gold ETFs needed about five years to achieve the same milestone, as noted by Balchunas.

The total assets under management for Bitcoin ETFs have now climbed to $65 billion, accounting for approximately 4.9% of Bitcoin’s circulating supply.

The Bitcoin ETF market recorded more outflows than inflows within the past two weeks. After three consecutive days of net negative flows between October 7 and 9, the fund saw over $253 million worth of bitcoin infused into the market. This kicked off a four-day streak of gains for the sector. On October 14, the 12 spot Bitcoin ETFs saw a net inflow of $556 million, the highest single-day inflow since early June.

Could BTC Reclaim $73K?

Despite the inflows into ETFs, BTC’s price has struggled below the $70,000 price mark. At some point, the leading cryptocurrency tanked to as low as $58,000. Still, some analysts predict BTC could return to its previous highs before the upcoming US presidential election, driven by broader market trends and political developments.

Standard Chartered has issued a bullish outlook for Bitcoin. Analyst Geoff Kendrick suggests that Bitcoin might reach its previous peak of $73,800 ahead of the US election. He pointed out that this potential rally could be influenced by factors such as a steepening US Treasury yield curve, renewed enthusiasm for spot Bitcoin ETFs, and increasing odds of a Donald Trump victory in the election.

This optimistic outlook aligns with data from blockchain analytics platform IntoTheBlock, showing that 95% of Bitcoin addresses are currently profitable. This reflects positive market sentiment, and historically, such levels of profitability have been linked to strong bullish momentum. However, this trend can also signal a risk of potential overextension.