Simultaneously, a capital rotation pattern from Ethereum to Bitcoin is evident, as investors favor Bitcoin as a safer asset in anticipation of potential market volatility.
U.S. spot Bitcoin exchange-traded funds (ETFs) recorded a significant influx of capital on Monday, reversing two days of consecutive outflows.
The $368.25 million net inflow was the largest single-day inflow since August 8, according to SoSoValue data. With none of the twelve spot Bitcoin ETFs recording outflows, data pointed to renewed conviction from institutional investors.
Fidelity’s FBTC led the inflows with a net inflow of $156.50 million, followed by Ark Invest and 21 Shares’ ARKB with $89.47 million.
The institutional buying activity aligns with the week’s key macroeconomic reports, including Tuesday’s Nonfarm Payrolls revisions, Wednesday’s Producer Price Index, and Thursday’s Consumer Price Index.
Experts highlighted the importance of the upcoming inflation report and its role in shaping the highly anticipated Federal Reserve’s interest rate decision on September 17, Decrypt previously reported.
According to Illia Otychenko, lead analyst at CEX.IO, this behavior reflects investors positioning themselves ahead of the upcoming September 17 rate decision by the Federal Reserve.
While a modest quarter-point rate cut was already anticipated, he explained, a growing possibility of a half-point cut is now driving “extra interest” in the crypto space.
Ethereum ETFs contrasted the bullish trend with a negative net flow of $96.69 million, marking a sixth consecutive day of outflows. “Capital rotation patterns suggest funds are shifting back into Bitcoin from Ether,” Otychenko noted, indicating a change in investor sentiment.
He explained, “Investors chased Ethereum for higher upside when sentiment was stronger, but are now favoring Bitcoin as the safer bet ahead of the Fed decision.”
Regardless, the short-dated implied volatility for Bitcoin and Ethereum surged by 15% over the weekend, a clear sign that options traders are bracing for a major move in the coming days.
Bitcoin is currently trading at around $112,654, up 0.8% on the day, while Ethereum is changing hands for $4,348, up 1.1% in the past 24 hours, according to CoinGecko data.
