Bitcoin ETFs Surge With Biggest Inflows Since July Ahead of Fed Cut
Bitcoin ETFs (exchange-traded funds) logged their strongest inflows in nearly two months last week, as investors piled into the market ahead of the Federal Reserve’s anticipated interest rate cut.
According to digital assets firm K33 Research, global Bitcoin exchange-traded products (ETPs) recorded net inflows of 20,685 BTC, marking the highest weekly intake since July 22. The surge boosted U.S. spot Bitcoin ETFs’ combined holdings to 1.32 million BTC, surpassing the previous peak set on July 30.
U.S. Bitcoin ETFs Drive Demand
U.S.-listed Bitcoin ETFs accounted for nearly 97% of last week’s inflows, underscoring the country’s outsized role in fueling demand ahead of Wednesday’s Federal Open Market Committee (FOMC) meeting. Markets widely expect the Fed to announce its first interest rate cut of 25 basis points, following soft inflation data and signs of cooling economic growth.
“ETF inflows tend to be one of the key determinants of Bitcoin’s performance,” noted André Dragosch, head of research for Europe at Bitwise Investments. He added that the share of Bitcoin’s performance explained by ETP flows has now reached a new all-time high.
Rotation Back to Bitcoin
Dragosch also highlighted a noticeable “re-rotation” from Ethereum ETFs back to Bitcoin, as investors favor BTC ahead of macro shifts. Data shows that flows into Bitcoin ETFs surpassed new supply growth by nearly 9 times last week, providing a strong tailwind for prices.
US Bitcoin ETF flows (Source: Farside Investors)
Analysts at K33 echoed this view, writing that ETF activity has been the primary driver of Bitcoin’s strength since spot ETF approvals last year, with the latest surge signaling accelerating demand. Over the past 30 days, investors have accumulated 22,853 BTC through ETFs, significantly outpacing the new supply of 14,056 BTC.
Fidelity Leads the Charge
Among individual products, Fidelity’s FBTC dominated last week’s demand, recording $843 million in net inflows—around 36% of the total $2.34 billion across all funds. This marked an 18-month high for Fidelity’s Bitcoin ETF.
Bitwise analysts pointed out that, while expectations of Fed easing are a major driver, sentiment has also been buoyed by a wave of crypto-related IPOs and announcements.
Volatility Remains Muted
Despite the surge in inflows, Bitcoin’s volatility remains historically subdued. K33 Research noted that Bitcoin’s seven-day volatility fell to yearly lows below 0.7% last week before ticking up modestly as prices climbed above $115,000. This marks 11 consecutive days of below 1.3% volatility, the second-longest such stretch in 2025.
Bitcoin’s implied volatility, derived from options markets, also remains near multi-year lows. Analysts cautioned that with muted trading activity, high offshore leverage, and few immediate catalysts beyond the Fed’s policy move, directional signals remain mixed.
Fed Decision Looms Large
The FOMC’s upcoming rate decision could set the tone for the next phase of Bitcoin’s rally. Historically, Fed rate cuts have bolstered risk assets, with crypto often responding more sharply than traditional markets.
If the expected 25-basis-point cut materializes, it may provide further support to Bitcoin ETFs as inflows continue to outpace supply.
