Bitcoin (BTC) ETF, Weekly $2.39 Billion New Record...Real Demand or Illusion?

▲ Bitcoin (BTC)

The U.S. Bitcoin (BTC) spot Exchange Traded Fund (ETF) market saw its largest weekly inflow of funds this year, but market interpretations are divided on whether it signifies a true expansion of demand, given the sharp decline in daily inflows and conflicting on-chain indicators.

According to cryptocurrency specialized media BeInCrypto on September 26 (local time), U.S. Bitcoin spot ETFs recorded a total net inflow of $2.39 billion this week, setting a new highest weekly record. Data compiled by virtual asset data platform SoSoValue showed an explosive start with $998.95 million flowing in on Monday, September 21 alone. However, the scale of inflows gradually slowed down, decreasing to $134.47 million by Friday. Although net inflows were maintained for seven consecutive trading days, the daily inflow amount sharply decreased by approximately 87% compared to Monday.

The slowdown in fund inflows coincided with the announcement of macroeconomic indicators. On September 23, S&P Global's U.S. business activity survey confirmed the fastest growth since July 2021, and with the 10-year U.S. Treasury yield surpassing 5% annually, Bitcoin's price fell below $84,000. The total assets under management for Bitcoin spot ETFs currently stand at $108.42 billion, and Bitcoin is currently fluctuating around the $84,241 mark.

Some on-chain indicators support the existence of strong dip-buying. According to on-chain analytics platform CryptoQuant, approximately $2.52 billion worth of Bitcoin was net-outflowed from major exchanges between September 22 and 24. Santiment's data also showed that large wallet groups holding between 100 BTC and 1,000 BTC accumulated a total of 113,950 BTC since July 15.

Conversely, Bitcoin financial services company River diagnosed that the current rebound is not due to an influx of new buyers but rather an extreme supply shortage. According to River's data, 16.3 million BTC, representing 81% of the total circulating supply, has not moved at all for at least the past six months. Exchange trading volume has also decreased by 30% compared to the beginning of the year. River's analysis team explained, “Bitcoin rose by 50% even without an actual increase in demand,” adding, “The price was pushed up more by a sharp decrease in the number of coins changing hands in the market rather than an influx of new buyers.”

The market is eyeing the August Personal Consumption Expenditures (PCE) price index, set to be announced on September 30, as the next test. Attention is focused on whether the inflation indicator, closely watched by the Federal Reserve (Fed), will show a slowdown, and if actual additional institutional funding will follow.

[Article Key Summary]

-U.S. Bitcoin spot ETFs saw a net inflow of $2.39 billion weekly, setting a new highest weekly record, but daily inflows plummeted by 87%.

-Over $2.5 billion worth of Bitcoin flowed out of exchanges, and whales accumulated 113,950 BTC, showing strong accumulation.

-River analyzed that 16.3 million BTC, or 81% of the total supply, has been locked up for six months, suggesting the price increase is due to a supply shock rather than an actual increase in demand.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*