Spot bitcoin ETFs log $553 million in daily inflows as capital rotates back into BTC

Spot bitcoin exchange-traded funds in the U.S. saw a total daily net inflow of $552.78 million on Thursday as institutional investors rotate back to bitcoin with renewed confidence.

According to data from SoSoValue, BlackRock's IBIT led net inflows yesterday with $366.2 million, followed by $134.7 million into Fidelity's FBTC. Bitwise's BITB reported $40.43 million worth of positive flows, while other funds from VanEck, Invesco and Franklin Templeton also saw inflows.

Thursday's flow data marks the fourth consecutive positive flow day for bitcoin ETFs. In the four days, the ETFs saw a cumulative net inflow amount of $1.7 billion.

"Institutional flows suggest a capital rotation back into Bitcoin, reflecting both macro stability and positioning ahead of the Fed’s rate decision," said Vincent Liu, CIO at Kronos Research. "Strong ETF inflows indicate renewed confidence and liquidity preference in BTC."

Spot bitcoin ETFs saw $751 million in outflows for August, making it the third-worst month since their January debut. This occurred as spot Ethereum ETFs saw their second best month yet, drawing in $3.87 billion. This strengthened the BTC to ETH "capital rotation" narrative that circulated in August, contributing to bitcoin's fall to trade around $107,500 at the end of last month.

Spot ether ETFs, on the other hand, have seen negative flows in the first five days of September, but returned to net inflows after. The ETH funds recorded $113.12 million in inflows on Thursday. 

According to The Block's crypto price page, bitcoin is up 1.04% in the past day to trade at $115,455 as of 2:20 a.m. on Friday, while ether is up 2.87% to $4,553. The entire crypto market is up 1.81%, data shows.

"Continued ETF inflows could push BTC past ATH as institutions rotate in, tightening liquidity and supply while boosting momentum, so long as macro conditions stay steady," Liu noted. "Cryptos are bouncing back with ETF inflows, institutional rotation, and steady macro trends which are boosting liquidity and sentiment, lifting prices across the board."

Investors are now watching the Federal Open Market Committee meeting on September 16-17, with growing expectations of an interest rate cut. CME Group's FedWatch Tool currently gives a 92.5% chance of a 25 basis point cut at next week's meeting, and a 7.5% chance there will be a 50 basis point cut.