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After a day of significant outflows, Bitcoin ETF inflow made a strong comeback on Jan. 28, signaling renewed investor confidence as Bitcoin surged back above $102,000. The rebound comes at a critical time, with markets closely watching the Federal Open Market Committee (FOMC) meeting, set to begin in just hours.
Spot Bitcoin exchange-traded funds (ETFs) in the U.S. saw a sharp reversal in investment flows, registering a net inflow of $18.44 million, according to data from SoSoValue. This marks a stark contrast from the previous day’s dramatic $457.48 million outflow, which was triggered by investor concerns over market instability and the rising influence of the Chinese AI-driven trading app DeepSeek.
Leading the charge in Bitcoin ETF inflow was BlackRock’s iShares Bitcoin Trust (IBIT), which alone attracted $30.14 million. The spot Bitcoin ETF, which has been a dominant player in the market, now boasts total net inflows nearing $40 billion and net assets of $58.76 billion. However, not all ETFs experienced positive flows—ARK Invest and 21Shares’ ARKB fund recorded a net outflow of $11.7 million, partially offsetting the gains seen by IBIT.
The overall trading volume for the 12 Bitcoin ETFs stood at $2.49 billion on Jan. 28, a significant drop from the $4.8 billion recorded the previous trading day. Analysts suggest that the decline in volume reflects investors taking a cautious approach ahead of the FOMC meeting, which could set the tone for broader market movements.
Bitcoin’s price action has been a focal point in recent days, particularly as it briefly dipped near $100,000 before rebounding to $102K. This recovery has provided some relief to traders and institutional investors, who remain on edge about potential macroeconomic developments.
With the FOMC meeting set to commence in less than 13 hours, Bitcoin ETF inflow trends may continue to shift depending on the Federal Reserve’s stance on interest rates. According to CME’s FedWatch tool, there is a 98.4% probability that the Fed will maintain rates at 4.25% to 4.50%, a decision that could have significant implications for Bitcoin and other risk assets.
Matt Mena, a crypto research strategist at 21Shares, weighed in on the situation, stating:
“The likelihood of a rate hike is effectively zero given the recent instability in equity markets. However, if the Fed surprises with a 25 basis point rate cut, it could serve as a strong catalyst for a rally across risk assets, including Bitcoin.”
Market sentiment has been mixed, with some traders betting on continued Bitcoin ETF inflow amid a steady policy stance, while others remain cautious about the potential for hawkish rhetoric from Fed Chair Jerome Powell. Any signals of a prolonged higher-rate environment could trigger short-term volatility in both Bitcoin and the broader crypto market.
Despite the volatility, institutional interest in Bitcoin ETFs remains strong. BlackRock’s IBIT continues to be a preferred vehicle for investors looking to gain exposure to Bitcoin through regulated financial products. Analysts note that Bitcoin ETF inflow patterns have increasingly mirrored broader macroeconomic trends, with investors treating BTC as a hedge against inflation and monetary policy uncertainty.
Eric Balchunas, an ETF analyst at Bloomberg, noted on X (formerly Twitter):
“Bitcoin ETF inflow remains resilient despite short-term outflows. Long-term demand, especially from institutions, is what will ultimately drive Bitcoin ETFs to new highs.”
The dominance of BlackRock’s IBIT in the Bitcoin ETF inflow landscape underscores the growing role of traditional financial giants in shaping the cryptocurrency market. The fund’s ability to attract inflows even in the face of broader risk-off sentiment suggests that Bitcoin ETFs are becoming a more stable investment vehicle for institutional players.
As Bitcoin holds above $102K, investors are closely watching whether Bitcoin ETF inflow momentum can continue in the wake of the FOMC decision. Should the Federal Reserve maintain a neutral or dovish stance, Bitcoin could see further upside, reinforcing demand for ETFs as a convenient way for institutional investors to gain exposure.
However, any indication of prolonged monetary tightening could lead to another wave of outflows, similar to what was seen on Jan. 27. The reaction of the equity markets, particularly tech stocks, will also play a key role in shaping Bitcoin’s short-term trajectory.
For now, Bitcoin ETF inflow has bounced back, providing a much-needed confidence boost to the market. Whether this trend sustains depends largely on macroeconomic factors and investor sentiment in the coming days.
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