Bitcoin Price Breaches $114K as ETF Inflows Hit 8-Week High

Bitcoin bounced back from Tuesday’s low of $110,714 and topped $114,000 Thursday morning, reaching its highest level since August 24, per CoinGecko data.

Its price movement comes as U.S. spot Bitcoin ETFs notched inflows of $757.1 million Wednesday, per SoSoValue, an eight-week high. In total, U.S. ETFs have accumulated $1.39 billion worth of Bitcoin in September.

“These inflows were largely driven by the excellent news from the PPI numbers, which came in much better than expected,” DarkFrost, a pseudonymous verified analyst at CryptoQuant, told Decrypt.

Bitcoin’s recent push beyond $113,000 is an “encouraging sign,” according to DarkFrost, who noted that its uptrend was accompanied by a 6.60% rise in open interest to $43.3 billion and positive funding rates.

While Bitcoin ETFs have been flooded with a multi-week record in inflows, Ethereum funds are on the sidelines with a negative netflow of $668.72 million for September, SoSoValue data shows.

This is a “capital rotation pattern,” Illia Otychenko, lead analyst at CEX.IO, told Decrypt in a previous report, suggesting that funds are “shifting back into Bitcoin from Ether,” in anticipation of the September 17 Fed rate cut decision.

Bitcoin ETFs Draw In $368M, Showing Strongest Demand Since August

Worsening jobs data releases over July and August have put the Fed under pressure to cut interest rates. Core inflation, however, has hovered above 3%, which conflicts with the central bank’s dual mandate.

Investors, as a result, are expecting the Fed to stimulate the economy with a larger-than-anticipated rate cut.

With a quarter-point rate cut all but factored in, investors could be speculating on a half-point rate cut, which could be driving Bitcoin’s ETF inflows, said Stephen Gregory, founder of crypto trading platform Vtrader, in another Decrypt report.

CME’s FedWatch tool shows 92% odds of a 25 basis point rate cut and an 8% chance of a 50 basis point rate cut. Users of Myriad, a prediction market launched by Decrypt’s parent company DASTAN, put an 80% chance on the Fed cutting interest rates by 25bps.