Bitcoin spot ETFs on June 12 experienced a remarkable net inflow of $101 million, reflecting growing investor confidence and interest in the leading cryptocurrency.
What Happened: This surge in inflows highlights a renewed optimism in the digital asset market, despite recent market pressures and ambiguous signals from the Federal Reserve.
Leading the inflows, Fidelity’s ETF (BATS:FBTC) recorded an impressive daily inflow of $50.623 million, followed by BlackRock’s ETF (NASDAQ:IBIT) with $15.5789 million, according to data from SoSo Value.
Grayscale’s ETF (OTC:GBTC) saw no net outflow or inflow, remaining static for the day.
According to QCP Capital, recent CPI numbers sparked a breakout in risk assets, with US equities hitting new all-time highs and Bitcoin surging to $70,000 before settling back to $67,300.
This positive movement in Bitcoin (CRYPTO: BTC) spot ETFs comes at a time when the market is pricing in two potential rate cuts in 2024, with interest-rate futures indicating a 56% chance of a rate cut in September and a second cut in December.
“Last night’s CPI numbers ignited a breakout in risk assets,” QCP Capital noted.
“U.S. equities hit new all-time highs, while BTC surged to $70,000 before settling back to $67,300 this morning.”
Despite the Federal Reserve’s dot plot remaining ambiguous, making it challenging to predict the exact number of rate cuts this year, analysts maintain a bullish outlook.
“We anticipate a rate cut in September, with the FED likely adopting a wait-and-see approach for subsequent meetings in November and December,” QCP Capital explained.
Also Read: Altcoin Season On The Horizon? Analysts Point To Potential Early Peak
Why It Matters: Markus Thielen, founder of 10x Research, remains optimistic about Bitcoin’s trajectory, according to Coindesk.
“Our recommendation remains unchanged: to stick with the winners (Bitcoin) and avoid others (such as Ethereum). A lower CPI number tends to lift Bitcoin prices, and we anticipate this trend will continue,” Thielen stated.
Thielen also highlighted the historical trend where lower inflation rates attract significant inflows into Bitcoin ETFs.
Provisional data from Farside Investors indicated that Bitcoin ETFs amassed $100 million on Wednesday, reversing a two-day outflow streak.
“ETF flows turned positive at the end of January but only started to accelerate slightly ahead of the CPI data release in February,” Thielen noted.
“But when inflation again increased to 3.2% on March 12, Bitcoin ETF inflows stopped as the market priced out the narrative of 2-3 rate cuts.”
With the market anticipating potential rate cuts and the likely approval of the ETH ETF S-1 later this year, a structurally bullish outlook for Bitcoin and other digital assets seems well-founded.
QCP Capital suggests building a coin position using a longer-tenor accumulator to capitalize on the higher volatilities further out.
What’s Next: As Bitcoin and other digital assets continue to gain traction, the upcoming Benzinga Future of Digital Assets event on Nov. 19 will provide a platform for industry leaders and experts to discuss these trends.
Read Next: Bitcoin Holders Should Be Watching This Dot Plot At Today’s FOMC Meeting
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