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Exchange traded funds investing directly in bitcoin (BTC-USD) garnered $252M in net inflows on Friday, when Federal Reserve Chair Jerome Powell made plain “the time has come” to start cutting interest rates.
That’s the highest level of net inflows since July 23. Trading volumes for the eleven spot bitcoin (BTC-USD) ETFs reached $3.12B, the highest mark since July 19, data from SoSoValue showed.
The iShares Bitcoin Trust (NASDAQ:IBIT) led the pack with trading activity of $1.2B and inflows of $83M. Next was the Fidelity Wise Origin Bitcoin Fund (BATS:FBTC), raking in net inflows of $64M, and the Bitwise Bitcoin ETF (NYSEARCA:BITB), with $42M in net inflows. The only fund showing net outflows was the Grayscale Bitcoin Trust (NYSEARCA:GBTC), at -$35M. Grayscale’s mini bitcoin fund (NYSEARCA:BTC), though, managed to collect $50M in net inflows.
The strength in overall net inflows comes as Fed boss Powell signaled at the Jackson Hole symposium Friday that the central bank is poised to initiate monetary-policy easing, after holding borrowing costs at a 23-year high for more than a year to contain inflation.
The price of bitcoin (BTC-USD) shot up to above $64K following Powell’s remarks, with traders increasingly pricing in a rate cut at the next Fed meeting on Sept. 17-18. The cryptocurrency has since pared gains, though, changing hands at $63.6K in Monday morning trading.
By making borrowing cheaper and potentially boosting demand for riskier assets, lower rates can bode well for bitcoin’s (BTC-USD) price. Conversely, higher rates make borrowing more expensive, driving investors toward safer options (i.e., Treasury bonds, money market funds).