Bitcoin Surpasses $80,000: $2.8 Billion Flow into ETFs, Why Did Futures Positions Shrink?

During Bitcoin’s rally from $63,500 to over $80,000, approximately $2.8 billion in ETF inflows were observed, while futures open interest shrank.

The fact that risk did not increase in the futures market as the Bitcoin price rose revealed an important picture of how the movement took shape. QCP Capital stated that the rally above $80,000 may have been supported by spot demand and the closing of bearish positions rather than aggressive leveraged buying.

During Bitcoin’s ascent starting from $63,500, approximately $2.8 billion in inflows occurred into spot ETFs, which provide exchange-traded investment in Bitcoin. In the same period, open interest in BTC-denominated futures fell from approximately 646,000 BTC in mid-August to 588,000 BTC. Low funding rates also indicated that the accumulation of over-leveraged long positions remained limited in the market.

Spot Demand Stood Out in Bitcoin Rally

This outlook indicates that Bitcoin purchases were concentrated in the spot market and that investors expecting a decline were buying while closing their positions. The closing of these positions contributed to the decrease in total open interest in the futures market while the price rose. Thus, the rally was not explained solely by the growth of new leveraged bets.

Macroeconomic conditions, on the other hand, continued to remain in the background of the movement. July core Personal Consumption Expenditures (PCE) inflation remained stable at 3.3 percent on an annual basis. Markets priced in the probability of a 25 basis point rate hike at the US Federal Reserve’s September meeting at approximately 35 percent.

The US Treasury’s plan to increase buybacks supporting liquidity in long-term bonds to at least $4 billion per operation starting September 9, and Nvidia’s strong financial results, also supported risk appetite. However, this program was not defined as Bitcoin buying or quantitative easing.