Spot Bitcoin ETFs experienced an extraordinary influx of capital on March 20, skyrocketing over 1,300% in one day after the U.S. Federal Reserve opted to maintain interest rates, which alleviated some of the anxiety surrounding inflation and general economic uncertainty.
According to data from a market analysis platform, 12 spot Bitcoin ETFs collectively attracted $165.75 million in net inflows on Thursday, a stark increase from just $11.8 million the previous day. This boost also marked the fifth consecutive day of positive inflows, with nearly $700 million flowing into Bitcoin ETFs during that time.
BlackRock’s IBIT led the surge with a staggering $172.14 million in net inflows, bouncing back after a day of stagnation. Other notable funds such as VanEck’s HODL, Fidelity’s FBTC, and Grayscale’s mini Bitcoin Trust also saw modest gains of $11.9 million, $9.19 million, and $5.22 million, respectively.
However, not every fund fared well. Entities like Bitwise’s BITB, Grayscale’s ETHE, and Franklin Templeton’s EZBC saw investors withdrawing nearly $32.7 million combined, indicating that sentiment varies significantly among different providers.
The ramp-up in ETF interest follows a challenging five-week period of outflows, as investors had been hesitant due to worries over trade tensions, escalating geopolitical risks, and macroeconomic uncertainty. But the Federal Reserve’s recent meeting offered some reassurance.
During the meeting, Fed Chair Jerome Powell adopted a more cautious tone, implying that inflationary pressures, particularly from potential tariffs reminiscent of the previous administration, could be temporary. This created optimism around the possibility of future rate cuts, uplifting risk-sensitive markets such as crypto.
Bitcoin promptly reacted by climbing 4.5% to $85,786, even peaking at $87,431 briefly. Ethereum and Solana also joined the upswing, posting gains of 4% and 6%, respectively. The overall cryptocurrency market cap rose by 3% to $2.947 trillion, while futures markets recorded $355 million in liquidations, primarily from short positions.
Further bolstering the positive sentiment was an announcement confirming that mining operations for Proof-of-Work cryptocurrencies like Bitcoin, Litecoin, and Bitcoin Cash would not be classified under existing securities laws.
Nonetheless, at the time of writing, Bitcoin (BTC) had dipped by 2% in the last 24 hours, trading at $84,165 per coin.
While the surge in ETF inflows suggests renewed interest in regulated BTC exposure, experts remain divided regarding Bitcoin’s immediate future.
Analyst RJT_WAGMI highlights that Bitcoin is at a crucial technical junction, testing a descending trendline while encountering resistance from the 100-day moving average and the Ichimoku Cloud. The analyst mentioned that a breakout from this zone could trigger a significant rally, but a rejection could lead to downward movement.
Trader Great Mattsby offers a broader perspective, suggesting that Bitcoin remains within a long-term upward logarithmic trend channel, hinting that the next major peak might not materialize until 2025-26, indicating potential further growth.
Meanwhile, CryptoQuant’s CEO Ki Young Ju provides a macro perspective, asserting that while retail demand is robust, especially via ETFs, it no longer aligns with on-chain metrics as it once did.
He posits that the bull cycle may be technically over—not in a catastrophic sense—but that it could take another 6 to 12 months for Bitcoin to surpass its all-time high, constrained by tight liquidity and broader economic factors.