Bitcoin ETF Inflows Surge Following Federal Reserve’s Rate Decision
Following the Federal Reserve’s decision to hold interest rates steady, Bitcoin ETFs witnessed an inflow surge of over 1,300% on March 20, totaling $165.75 million, marking five consecutive days of positive inflows. BlackRock’s IBIT led with $172.14 million, while some funds faced outflows. Analysts are split on Bitcoin’s near-term future, noting crucial technical levels and potential market conditions influencing its trajectory.
On March 20, spot Bitcoin ETFs experienced a remarkable increase in inflows, surging over 1,300% in one day following the U.S. Federal Reserve’s decision to maintain interest rates. This decision alleviated concerns related to inflation and economic uncertainty, leading investors to return to the market. According to SoSoValue, these ETFs attracted $165.75 million in net inflows, a substantial rise from $11.8 million the prior day, marking five consecutive days of positive inflows totaling nearly $700 million.
BlackRock’s ETF, IBIT, garnered the most attention with net inflows of $172.14 million after a previous day of inactivity. Other significant contributors included VanEck’s HODL, Fidelity’s FBTC, and Grayscale’s mini Bitcoin Trust, with gains of $11.9 million, $9.19 million, and $5.22 million respectively. Conversely, some funds, including Bitwise’s BITB and Grayscale’s ETHE, experienced withdrawals totaling approximately $32.7 million, indicating a disparity in investor sentiment.
The renewed demand for Bitcoin ETFs follows a challenging five-week period of outflows attributed to fears over trade conflicts, geopolitical tensions, and macroeconomic instability. The Fed’s recent meeting brought optimism, as Chair Jerome Powell adopted a more dovish tone regarding inflation, which could lead to future interest rate cuts, encouraging riskier market investments.
In response to the positive news, Bitcoin prices surged by 4.5%, reaching values of $85,786 and briefly touching $87,431. Ethereum and Solana also posted gains of 4% and 6%, respectively, contributing to a total crypto market capitalization increase of 3% to $2.947 trillion. Despite these advancements, Bitcoin was reported to be down by 2% in the subsequent 24 hours.
Analysts are divided regarding Bitcoin’s future trajectory. RJT_WAGMI highlighted that Bitcoin is currently at a critical technical juncture, suggesting that breaking through a particular trendline could result in a significant rally, while a rejection may lead to declines. In contrast, trader Great Mattsby pointed out Bitcoin’s position within a long-term upward trend, implying potential growth until approximately 2025-26.
From a broader perspective, CryptoQuant CEO Ki Young Ju cautioned that the strong retail demand observed through ETFs does not necessarily reflect on-chain dynamics as before. He suggested that the bull cycle may be slowing, not crashing, and it could take an additional 6 to 12 months for Bitcoin to surpass its historical peak due to tighter liquidity and ongoing economic conditions.
The recent surge in Bitcoin ETF inflows, driven by the Federal Reserve’s decision to maintain interest rates, indicates a renewed interest in regulated Bitcoin exposure. However, investor sentiment varies among specific funds, and analysts are mixed about Bitcoin’s immediate prospects. While some foresee potential optimism in the long-term trajectory, others remain cautious about the macroeconomic landscape’s impact on future price movements.
Original Source: crypto.news
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