Liquidity Surges into Spot Bitcoin ETFs, Exceeding $1 Billion

This week, liquidity flowing into spot Bitcoin exchange-traded funds (ETFs) surpassed $1 billion, as analysts anticipate a new all-time high for the top cryptocurrency within the next three months.

For the first time since July, weekly inflows into spot Bitcoin ETFs exceeded the billion-dollar mark, reaching $1.11 billion. This pushed the total cumulative net inflows across the 12 offerings to $18.8 billion, marking a new all-time high, according to SoSoValue data.

Notably, most of the inflows — $494.27 million — were recorded on September 27, led by ARK 21Shares’ ARKB, with only four of the twelve offerings registering no flows. Breakdown of the inflows includes:

  • ARK 21Shares’ ARKB: $203.07 million
  • Fidelity’s FBTC: $123.61 million
  • BlackRock’s IBIT: $110.82 million
  • Grayscale’s GBTC: $26.15 million
  • Bitwise’s BITB: $12.91 million
  • VanEck’s HODL: $11.17 million
  • Invesco’s BTCO: $3.28 million
  • Valkyrie’s BRRR: $3.26 million

Other ETFs such as Franklin Templeton’s EZBC, WisdomTree’s BTCW, Grayscale Bitcoin Mini Trust, and Hashdex’s DEFI saw no inflows.

Bitcoin Breaks Key Resistance Level

The uptick in inflows coincided with Bitcoin breaking past a key resistance level at $65,000. Some analysts believe this could spark a wave of FOMO-driven buying and set the stage for a run toward new all-time highs.

In his latest analysis, 10x Research’s Markus Thielen noted that Bitcoin’s recent breakout above $65,000 is a major catalyst for a potential Q4 rally. He believes this move could ignite a wave of FOMO, pushing Bitcoin toward $70,000 and setting the stage for new all-time highs sooner than most expect.

“The likelihood of a Q4 rally is exceptionally high, with gains likely front-loaded. A major surge could be on the horizon, sparking even more FOMO across the crypto space.”

Thielen pointed to a combination of factors driving this bullish momentum, including a sharp rise in stablecoin minting—nearly $10 billion issued after the Fed’s July meeting—flooding the crypto market with liquidity. He also noted that 55% of currently mined Bitcoins come from mining pools in China. The country’s massive monetary and fiscal stimulus measures, announced right after the Fed’s rate cut, could trigger significant capital outflows into cryptocurrencies, potentially accelerating Bitcoin’s bullish momentum.

Investor Sentiment and Market Optimism

Echoing Thielen’s bullish outlook, Matt Mena of 21Shares stated that Bitcoin’s surge past $65,000 is already igniting strong investor interest. According to Mena, lower-than-expected inflation data and the recent rate cut have fueled optimism for a more accommodative Fed, boosting appetite for risk assets. Coupled with global liquidity injections, this has created an ideal environment for Bitcoin’s continued rise as investors seek higher-yielding opportunities.

“For retail investors, this presents an opportune moment to increase exposure to risk assets, especially given BTC’s historical tendency to rally around this time during halving years.”

Meanwhile, one trader suggested on social media that Bitcoin could reach $124,000 by the end of 2024, citing historical data showing an average Q4 return of 88.84% following a positive September.

Historically, when Bitcoin has had a positive September, it has often set the stage for a strong Q4. The Bitcoin Fear and Greed Index surged to 64, rebounding sharply from its August low of 17 and signaling strong market optimism.

As of now, Bitcoin is trading at $65,757, up more than 4% for the week and 11.18% for the month — its best run since March. The flagship cryptocurrency is just 10.8% shy of its all-time high posted in March 2024.

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