ETF inflows, ‘debasement trade’ fuel bitcoin’s climb above $123K

Bitcoin's recent surge to over $123,000, just 1% shy of its all-time high, has been bolstered by approximately $2.2 billion in inflows from US bitcoin funds over the last four trading days. This is part of a broader ‘debasement trade’ that analysts are beginning to recognize. Notably, spot bitcoin ETF inflows bounced back in September following a $750 million outflow in August, highlighting a resurgence in investor interest. Analysts predict favorable conditions for bitcoin driven by an expected Federal Reserve rate cut and robust ETF inflows, with estimates suggesting bitcoin could retest $124,000, potentially reaching between $140,000 and $150,000 by the end of 2025. The overall crypto market cap is also expected to challenge the $5 trillion mark, reflecting a substantial increase from current levels. Market observers are also eyeing the implications of potential ETF launches, with industry giants like BlackRock and Vanguard possibly entering the space, which could further enhance bitcoin's position as a digital hedge amid fiscal uncertainties.

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