Spot bitcoin ETFs experienced their strongest weekly capital inflows in ten months last week, coinciding with a sharp rally in bitcoin prices. Data shows that 13 U.S.-listed funds attracted net inflows of $1.92 billion, marking the highest level since early October of the previous year.
This wave of capital coincided with bitcoin surging approximately 23% last week, its strongest weekly gain in over three years. During Asian afternoon trading on Monday, bitcoin was changing hands at around $77,000 in Singapore. The remarkable rally was initially fueled by U.S. plans to increase long-duration bond buybacks to lower yields, with the momentum further amplified by a short squeeze as traders were forced to cover their short positions.
The surge in ETF inflows signals renewed investor appetite for bitcoin. "We saw net inflows every trading day last week, indicating a resurgence of investor interest in bitcoin," said Gracie Lin, CEO of cryptocurrency exchange OKX SG. "The question now is whether this momentum can be sustained. After such a powerful rally, some profit-taking in bitcoin would not be surprising."
The latest weekly ETF inflow figure represents the highest since bitcoin plunged from its all-time high of over $126,000 on October 6 last year and entered what has been dubbed a "crypto winter." Notably, spot ETFs had recorded net outflows of nearly $390 million the prior week, the largest in six weeks.
During the latest week, BlackRock's iShares Bitcoin Trust attracted $1.3 billion in inflows. Even with this surge, bitcoin ETFs have still seen approximately $2.9 billion in outflows year-to-date.
Whether bitcoin's rally can translate into sustained demand and usher in a new bull market remains to be seen. "In the short term, the market appears overextended but remains well-supported," noted Jayke Kyndrede, senior sales trader at market maker QCP Group. "Some consolidation or pullback after such a rapid rise would not be unusual, but the timing and depth of any correction are difficult to predict while demand remains robust."