Bitcoin ETF Inflows Surge $2.3B Ahead of Fed Rate Cut – BTC Eyes $118K Breakout

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• Bitcoin ETFs pulled in $2.3B in a week, led by BlackRock and Fidelity.
  
• Fed rate cut expectations are driving institutional demand.
  
• Bitcoin ETFs aim to close the gap with gold as BTC nears $118K.

Spot Bitcoin ETFs are witnessing a strong resurgence in institutional demand, with inflows surging past $2.3 billion this week. On Friday, September 12 alone, spot Bitcoin ETFs attracted $642 million in fresh capital, marking their largest daily inflow this week. The renewed interest comes as major players position ahead of a widely expected U.S. Federal Reserve rate cut at the upcoming September FOMC meeting.

Data from Farside Investors shows that Fidelity Wise Origin Bitcoin Fund (FBTC) led the day with $315 million in inflows, followed by iShares Bitcoin Trust (IBIT) from BlackRock at $264 million. Both ETF shares have gained over 4% in the past week, signaling renewed confidence among institutional investors.

BlackRock’s IBIT Hits Record Activity

BlackRock’s IBIT alone saw 2,270 BTC in net inflows on September 12, worth around $264.58 million. It also registered $3.2 billion in daily trading volume, reinforcing its position as the most actively traded U.S. spot Bitcoin ETF. Building on its success, BlackRock has reportedly begun exploring tokenization plans for its IBIT ETF—an ambitious move that could reshape digital asset investing in the future.

Fed Rate Cuts Could Accelerate Bitcoin Rally

Market sentiment is being fueled by expectations that the Federal Reserve will begin cutting interest rates next week. A Reuters survey revealed that 105 out of 107 economists expect a 25 bps rate cut at the September 17 meeting, with up to three cuts likely by year-end. Lower rates could further boost risk-on appetite and push Bitcoin higher.

Also Read: Bitcoin Stalls as Whales Retreat — Retail Traders Drive Choppy Price Action

Bitcoin ETFs Race to Catch Up With Gold

Despite Bitcoin’s recent rebound, Gold has dominated 2024 with a 40% rally in the first eight months. Gold ETFs continue to see steady inflows as investors hedge against macroeconomic uncertainty. While Bitcoin ETF flows had stalled over the past month, this week’s surge suggests digital gold is trying to catch up with its traditional rival.

With Bitcoin hovering around $115,000, a decisive breakout above $118,000 could confirm the next leg of the bull run. If Fed rate cuts align with rising institutional inflows, Bitcoin ETFs may finally close the performance gap with gold funds.

Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.