Bitcoin ETF attracts $1.9 billion in one trading week

Bitcoin spot ETFs attracted a combined $1.9 billion in new inflows last week over five trading days. Ethereum also joined in, with more than $700 million flowing in. Notably, the inflows were partly fuelled by forced purchases by parties with short positions, after a hint of a limited form of monetary easing by the US Department of the Treasury set the market in motion. Bitcoin is trading at $77K on Monday.

Bitcoin is available at OKX and Bybit.

In short:

• Bitcoin spot ETFs received $1.9 billion over five trading days last week
• Ethereum ETFs saw more than $700 million in inflows over the same period
• Forced buybacks of short positions and a possible monetary policy shift drove the market

Five green days in a row after a series of outflows

According to data from Farside Investors, Bitcoin spot ETFs recorded a daily inflow of $308 million on August 21. Ethereum ETFs added $184 million on the same day. This meant both markets ended the week with five consecutive positive trading days, following an earlier period of five days of outflows.

The data shows that the inflows were spread broadly across the week, and are not the result of a single outlier day. That makes the $1.9 billion in Bitcoin ETF inflows notable: it reflects sustained demand across multiple sessions.

Short liquidations and signals of monetary easing as catalyst

Analyst DaanCrypto states that the main driver behind the sharp price movements last week were the forced buybacks by parties with short positions. They were hit by significant upward movements in the market.

What set the movement in motion, according to him, was a subtle hint from the US Department of the Treasury towards a limited form of monetary easing. That immediately triggered reactions in the market. It created optimism among several market participants and contributed to the broad inflows into both Bitcoin and Ethereum ETFs.

Whether the inflows continue in the coming trading weeks will partly depend on further signals regarding monetary policy and the willingness of institutional investors to expand positions at current price levels.