Bitcoin ETFs See Inflows as Cryptocurrency Reclaims $100k Mark

Bitcoin exchange-traded funds (ETFs) in the United States experienced a reversal in fortunes on January 28, as investors injected $18.44 million into the funds, marking a significant shift from the previous day’s $457.48 million outflow. This change in sentiment comes as the market prepares for the highly anticipated Federal Open Market Committee (FOMC) meeting.

Bitcoin ETF Inflows and Outflows

The 12 Bitcoin ETFs reported net inflows on Tuesday, with BlackRock’s iShares Bitcoin Trust (IBIT) attracting the majority of the inflows, at $30.14 million. This brings the fund’s total net inflows to nearly $40 billion, with net assets standing at $58.76 billion. However, not all Bitcoin ETFs shared in the inflows, as ARK and 21Shares’ ARKB recorded an outflow of $11.7 million, partially offsetting the day’s gains.

Market Sentiment and Bitcoin Price

After a brief dip near $100,000, Bitcoin has rebounded to around $102,000, holding steady above the six-figure mark. The market is currently bracing for the FOMC meeting, which is expected to maintain interest rates unchanged at 4.25% to 4.50%. According to CME’s FedWatch tool, there is a 98.4% probability of this outcome.

“The likelihood of a rate hike is effectively zero” given the recent instability in equity markets.

Matt Mena, a crypto research strategist at 21Shares, notes that an unexpected 25 basis point rate cut could serve as a strong catalyst for a rally across risk assets, including Bitcoin. However, if Fed chair Jerome Powell maintains a hawkish stance on monetary policy, market commentators expect Bitcoin to experience increased bearish volatility.

Tips for Investors

As the market prepares for the FOMC meeting, investors should consider the following:

  • Monitor interest rate decisions and their impact on the cryptocurrency market.
  • Keep an eye on Bitcoin’s price movements and adjust investment strategies accordingly.
  • Consider diversifying investment portfolios to minimize risk.

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