Inflows into spot Bitcoin exchange-traded funds in the United States sharply tapered off over the past week amid the Fed’s decision on interest rate cuts and a broader risk-off sentiment among investors following concerns over China’s launch of the AI platform Deepseek.
According to data from SoSoValue, the 12 spot Bitcoin ETFs experienced a significant drop in net inflows over the past week, drawing in $559.84 million from investors—nearly 68% less than the $1.76 billion recorded the previous week.
These investment products reportedly began the week of Jan. 27-31 with $457.48 million in outflows, triggered by the rising adoption of the Chinese AI app DeepSeek. The app, seen as a competitor to Sam Altman’s ChatGPT but created at a fraction of the cost, spooked investors and led to a crash in major stock prices while resulting in nearly $1 billion in liquidations across the crypto market that day.
For the next two days, spot Bitcoin funds saw inflows of $18.44 million and $92.09 million, though these remained relatively weak as the crypto community braced for FOMC meeting. Most had already anticipated that the Fed would keep interest rates unchanged at 4.25% to 4.50%.
Following the dovish stance taken by the Fed on the evening of Jan. 29, BTC ETFs saw a 500% surge in inflows the next day, attracting $588.22 million, led by BlackRock’s IBIT, which accounted for $321.5 million. The bullish inflows continued on Jan. 31 as the BTC ETFs saw $318.56 million flowing into the funds.
BlackRock’s IBIT led the pack for the day, attracting $363.83 million in inflows from investors. It was followed by ARK 21Shares’ ARKB and VanEck’s HODL, which recorded inflows of $35.59 million and $5.76 million, respectively. However, Bitwise’s BITB and Grayscale’s GBTC stood out as the only outliers of the day, with investors withdrawing $56.03 million and $30.59 million, respectively.
2025 to be bullish for Bitcoin ETFs
According to Matt Hougan, global head of research for Bitwise Assets Management, the 12-spot Bitcoin funds had pulled in nearly $35.2 billion worth of inflows in 2024. However, for 2025 he predicts inflows to surpass last year’s numbers.
While he warned of “significant month-to-month volatility in flows” for BTC ETFs over the coming months, he stated that Bitcoin ETFs would still “end the year north of $50 billion.”
The Bitcoin ETF market is also expected to expand this year. According to crypto commentator Andrew, a host of BTC ETFs from multiple notable issuers, such as Wells Fargo, Stifel, Raymond James, and UBS, could be approved by the end of the first quarter of 2025.
