Bitcoin ETFs draw $1bn but analysts warn of limited upside
A six-day streak of nearly $1 billion in inflows into US Bitcoin ETFs is failing to lift the cryptocurrency, with analysts warning that macroeconomic headwinds and supply dynamics could push prices even lower.
US Bitcoin exchange-traded funds have absorbed nearly $1 billion in fresh capital over the past six days, finally halting a prolonged period of lacklustre flows and sloppy price action. Data from Farside Investors shows that products managed by BlackRock, Morgan Stanley, and Grayscale accounted for over $930 million of that total since Tuesday last week.
Despite the renewed institutional demand, the underlying asset has barely moved. Bitcoin recently traded at $65,860, down slightly over the past 24 hours but up 1% over the week after touching a high of $66,891 yesterday. The cryptocurrency remains roughly 50% below its October record of $126,080, a peak erased by a massive liquidation event, Middle Eastern conflict, and inflation.
For market professionals, the divergence between strong fund inflows and stagnant prices highlights the macroeconomic overhang weighing on digital assets. Investors typically bid up Bitcoin on expectations of falling inflation and interest rate cuts. However, the re-escalation of the Trump administration’s war with Iran and rising oil prices threaten to push inflation higher, blunting the impact of the ETF demand.
European asset manager CoinShares cautioned that the fresh capital does not signal a breakout. “We have said for some time that Bitcoin has probably reached, or is close to, its floor,” James Butterfill, head of research at CoinShares, wrote. “But we see no significant upside potential from here.”
Structural issues are also dampening the outlook. A recent report by NYDIG argued that the current slump is driven by supply mechanics rather than broader risk sentiment. The firm noted that Bitcoin is the worst-performing major asset year-to-date, trailing US treasuries, silver, and the Swiss franc.
This supply-driven bearishness carries severe downside risks for investors holding the digital asset. NYDIG warned that if the current drawdown were to match previous severe corrections, such as the 2022 bear market, Bitcoin could see a “potential cycle low near $38k-$39k.”
