Bitcoin: $1.07B Enters ETFs in Three Days, but Price Drops

Spot Bitcoin ETFs in the US find buyers after several weeks of capital outflows. In three sessions, they attracted 1.07 billion dollars, thereby erasing losses recorded since early October. However, this investment recovery is not enough to support prices. The market remains under pressure as investors watch the upcoming Federal Reserve moves. This discrepancy raises questions about the strength of the current rebound.

Bitcoin ETFs Recover Their October Losses Thanks to $1.07 Billion

US spot Bitcoin ETFs recorded $524.8 million in inflows on Wednesday. This result extends a positive streak started on Monday, totaling about $1.07 billion in three sessions. Thanks to these new investments, funds have reversed their monthly balance. They now show a net gain of approximately $460 million in October.

This development marks a turnaround after several difficult days for fund managers. Until the previous Friday, ETFs had lost nearly $615 million since the beginning of the month. The cumulative outflows of the prior two weeks even reached about $910 million. The return of capital has therefore helped compensate for much of this decline.

On Monday, funds had already collected $526.7 million, their best performance since September 22. The entirety of this amount came from IBIT, BlackRock’s Bitcoin-dedicated fund. Since its launch, this product has helped bring ETFs’ cumulative net inflows to $58.4 billion. All funds now hold $100.8 billion in net assets.

This renewed interest comes as some Wall Street players maintain favorable long-term outlooks. This week, JP Morgan Asset Management published its first long-term forecasts for this asset. The firm anticipates a compound annual return of 10% over the next ten to fifteen years. It highlights, however, a volatility of 55%, which reminds investors of the risks related to market fluctuations.

Bitcoin Price Drops Despite Capital Return

Despite these massive inflows, the bitcoin price did not follow the same trajectory. On Thursday, the main cryptocurrency was trading around $81,470, a decrease of 2.4% over twenty-four hours. It still held a 2% gain over seven days. This drop comes after a weekly high near $85,000 reached the day before.

Ethereum also had a difficult session, falling 2.6% to about $2,393. Meanwhile, the total crypto market capitalization decreased by 2.9%, reaching $2.84 trillion. Zcash was among the most affected top 10 assets, with a decline of 5.6%. The cryptocurrency, however, still shows nearly a 14% increase over one week.

Prediction market data also show some caution about bitcoin’s next move. On Myriad, traders assess a 20% probability of exceeding $87,500 before the end of October. They give only a 9% chance of reaching $90,000. Conversely, they estimate a 35% risk of a drop toward $77,500 after briefly falling below $80,000 the previous week.

Ethereum forecasts show a different profile. On Myriad, users estimate a 61.3% probability that ETH will reach $3,000 before falling to $1,500. These estimates reflect participant expectations on the prediction market, without guaranteeing future price movements. The contrast between ETF flows and prices thus shows institutional purchases do not always cause immediate price increases.

The Fed and Crypto Market Outlook Remain at the Center of Expectations

Ethereum ETFs also resumed capital inflows on Wednesday. They collected $14.9 million, ending five consecutive sessions of outflows. During this period, withdrawals had reached about $389 million. Despite this improvement, their monthly balance remains largely negative, with a deficit of about $1.07 billion in October.

Since their launch, these funds have, however, accumulated $12.8 billion in net inflows. Their recent rebound remains limited compared to the outflows registered in the month. This situation contrasts with that of Bitcoin ETFs, which have managed to return to a positive balance. Investors are now watching whether new inflows can be maintained over the coming sessions.

The next US Federal Reserve meeting is among the main events to watch. Scheduled for October 27 and 28, it could influence investor expectations regarding interest rates. The persistence of inflation notably maintains the possibility of another rate hike. In this context, risky assets could remain sensitive to monetary policy announcements.

In the short term, bitcoin’s evolution will notably depend on ETFs‘ ability to maintain inflows and the return of buyers to the spot market. Continued investments could help stabilize prices, without guaranteeing a new upward move. Conversely, new outflows or rate-related concerns could increase current pressure. The next sessions and Fed decisions will better assess the strength of this flow recovery.

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The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.