U.S. spot bitcoin ETFs experienced a remarkable surge, recording over $870 million in net inflows on Tuesday, coinciding with bitcoin's price approaching its lifetime highs ahead of the upcoming U.S. elections.
BlackRock’s IBIT led the charge with more than $629 million in inflows, according to SoSoValue data. Other notable performers included Fidelity’s FBTC with $133 million, Bitwise’s BITB at $52 million, Grayscale’s mini bitcoin trust (BTC) at $29 million, VanEck’s HODL at $16 million, and Ark’s ARKB at $12 million. Grayscale’s bitcoin trust (GBTC) was the sole ETF to record outflows, totaling $17 million.
Total trading volumes exceeded $4.75 billion, marking the highest level since March, with IBIT alone accounting for $3.3 billion of that total.
Bitcoin Heading to $80k in November?
The uptick in ETF demand aligns with bitcoin's recent price surge, just shy of its all-time high. The market is currently buzzing with pre-election volatility expectations. Analysts predict that bitcoin could target the $80,000 mark in November, with a surge in options bets supporting this forecast.
On Tuesday, BTC saw a 3% increase, extending its weekly gains to 7.7% and contributing to a broader market rally. Bloomberg ETF analyst Eric Balchunas anticipates further inflows in the coming days, driven by investor "FOMO" (Fear Of Missing Out) on trading opportunities.
Balchunas noted, “$IBIT traded $3.3 billion today, the largest figure in six months. This surge often indicates a FOMO frenzy, similar to what we saw with $ARKK in 2020. Given the recent price increases, I expect more significant inflows this week.”
Bottom Line: High inflows into an ETF typically signal investor confidence in the underlying asset. While inflows may not directly affect the asset's value, the resulting buying pressure can lead to price increases due to supply-demand dynamics and heightened trader sentiment.
