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Inflows into spot Bitcoin exchange-traded funds in the United States sharply tapered off over the past week amid the Fed’s decision on interest rate cuts and a broader risk-off sentiment among investors following concerns over China’s launch of the AI platform Deepseek.
According to data from SoSoValue, the 12 spot Bitcoin ETFs experienced a significant drop in net inflows over the past week, drawing in $559.84 million from investors—nearly 68% less than the $1.76 billion recorded the previous week.
These investment products reportedly began the week of Jan. 27-31 with $457.48 million in outflows, triggered by the rising adoption of the Chinese AI app DeepSeek. The app, seen as a competitor to Sam Altman’s ChatGPT but created at a fraction of the cost, spooked investors and led to a crash in major stock prices while resulting in nearly $1 billion in liquidations across the crypto market that day.
For the next two days, spot Bitcoin funds saw inflows of $18.44 million and $92.09 million, though these remained relatively weak as the crypto community braced for FOMC meeting. Most had already anticipated that the Fed would keep interest rates unchanged at 4.25% to 4.50%.
Following the dovish stance taken by the Fed on the evening of Jan. 29, BTC ETFs saw a 500% surge in inflows the next day, attracting $588.22 million, led by BlackRock’s IBIT, which accounted for $321.5 million. The bullish inflows continued on Jan. 31 as the BTC ETFs saw $318.56 million flowing into the funds.
BlackRock’s IBIT led the pack for the day, attracting $363.83 million in inflows from investors. It was followed by ARK 21Shares’ ARKB and VanEck’s HODL, which recorded inflows of $35.59 million and $5.76 million, respectively. However, Bitwise’s BITB and Grayscale’s GBTC stood out as the only outliers of the day, with investors withdrawing $56.03 million and $30.59 million, respectively.
2025 to be bullish for Bitcoin ETFs
According to Matt Hougan, global head of research for Bitwise Assets Management, the 12-spot Bitcoin funds had pulled in nearly $35.2 billion worth of inflows in 2024. However, for 2025 he predicts inflows to surpass last year’s numbers.
While he warned of “significant month-to-month volatility in flows” for BTC ETFs over the coming months, he stated that Bitcoin ETFs would still “end the year north of $50 billion.”
The Bitcoin ETF market is also expected to expand this year. According to crypto commentator Andrew, a host of BTC ETFs from multiple notable issuers, such as Wells Fargo, Stifel, Raymond James, and UBS, could be approved by the end of the first quarter of 2025.
This article first appeared at crypto.news
