US spot Bitcoin ETFs shed $462.7 million over the past week, their first weekly loss since mid-August and the end of a three-week inflow streak. The reversal comes just as the Federal Reserve's Sept. 15-16 meeting raises the stakes for Bitcoin's ability to hold above $75,000.
US spot Bitcoin ETFs recorded $462.7 million in net weekly outflows, ending a three-week run of heavy investor demand. The funds bled money across all four trading sessions of the holiday-shortened week, marking their first weekly loss since mid-August.
SoSoValue data showed net withdrawals of $46.7 million Tuesday, the first trading day after Labor Day. Outflows then accelerated to $120.2 million Wednesday and $282.6 million Thursday before easing to $13.3 million Friday. The reversal remains modest, however, next to what preceded it: investors poured roughly $3.8 billion into the products over the prior three weeks as Bitcoin rallied briefly above $80,000.
Fed meeting raises the stakes for $75,000 support
That support has stalled just as the macro backdrop turns harder. Ecoinometrics, a Bitcoin-focused research platform, said the run of negative sessions remains too short to establish a lasting reversal in ETF demand, but an extended streak would make it increasingly difficult for Bitcoin to hold above $75,000.
The Federal Open Market Committee meets Sept. 15-16 after hotter inflation and rising Treasury yields sharply reduced expectations of an easy policy outcome. US consumer prices increased 0.4% in August and 3.4% from a year earlier, strengthening expectations that policymakers could raise rates. The 10-year Treasury yield approached 5% during the week before pulling back to about 4.93% Friday.
Higher yields complicate one of the arguments that has supported Bitcoin this year. The so-called debasement trade rests partly on demand for scarce assets as investors seek protection against persistent inflation, expanding government debt and declining purchasing power. But rising rates increase the returns available on government bonds and raise the opportunity cost of holding Bitcoin, which generates no yield on its own. Ecoinometrics said the debasement narrative can only offset tighter financial conditions for so long while rates keep climbing.
Bitcoin defends a swinging range near $75,000
Bitcoin's price action late last week reflected that tension. The cryptocurrency slipped from about $77,000 toward $76,000, rebounded to around $79,800 and then surrendered much of the advance. The swings leave $75,000 as an increasingly important threshold, since Bitcoin moved decisively above that level in August while ETF inflows were accelerating.
Still, there is insufficient evidence that ETF investors are abandoning the rally: last week's withdrawals erased only a fraction of the $3.8 billion accumulated over the prior three weeks and may reflect investors reducing risk ahead of a major policy decision. The Fed will announce its decision at 2 p.m. Eastern time Wednesday, followed by Chair Kevin Warsh's press conference 30 minutes later. The first ETF prints after that decision should offer a clearer test: renewed inflows would suggest the four-day withdrawal streak was largely pre-Fed positioning, while continued redemptions alongside elevated yields would leave Bitcoin defending its August breakout with less support from the buyers that helped create it.
Source: CryptoSlate
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