Bitcoin ETFs Attract $438M in Two Days Amid Market Dip

Investors are taking advantage of the recent dip in Bitcoin prices, resulting in significant inflows into Bitcoin exchange-traded funds (ETFs). Over the past two trading days, U.S. Bitcoin ETFs have seen a net inflow of $438 million, according to Bloomberg data.

Despite Bitcoin’s approximately 20% decline since early June, market participants are viewing this as a buying opportunity. “So many investors still don’t own Bitcoin, and that underpins the long-term bull case,” noted Charlie Morris, Chief Investment Officer at ByteTree. “This supply storm will soon pass.”

Seizing the Buying Opportunity

Bitcoin’s recent price drop, exacerbated by sales from sources like Mt. Gox repayments and a German government entity liquidating Bitcoin, has been seen by analysts as a prime buying opportunity. CoinShares reported total inflows of $441 million into digital asset investment products for the week. However, trading volumes in exchange-traded products remained low at $7.9 billion, consistent with typical summer patterns.

Historically, July has been a bullish month for the crypto market, with a median return of 9%. Many traders expect this trend to continue. SoSoValue data shows a cumulative net inflow for Bitcoin of $15 billion, with a daily net inflow of $294 million. Bitcoin ETFs currently hold total net assets of $49.32 billion, with Bitcoin priced at $55,844.2 at the time of reporting. These figures underscore the sustained institutional interest in Bitcoin through regulated ETF products, despite recent volatility and selling pressure. Investors buying during price dips could support Bitcoin’s value amid ongoing market challenges.

German Government Recovers $200M from Exchanges

In a boost to market sentiment, a German government entity recently recovered over $200 million worth of Bitcoin from various exchanges. This recovery helped lift Bitcoin prices, with the cryptocurrency trading just above $57,300 during Asian morning hours, reflecting a 3.5% increase in the past 24 hours. Other major cryptocurrencies, including Solana (SOL), Ether (ETH), and Dogecoin (DOGE), also saw notable gains.

Bitcoin had briefly dropped to as low as $55,000 on Monday, following a large transaction involving the German Federal Criminal Police Office (BKA). However, the BKA’s recovery of over $200 million from exchanges like Kraken, Coinbase, and Bitstamp within 12 hours reassured traders, as these assets did not hit the market.

Meanwhile, Bitcoin miners are facing a critical phase known as “capitulation” due to diminished profits amidst the recent sell-off. Miner capitulation occurs when miners reduce operations or sell a portion of their mined Bitcoin and reserves to sustain their activities, earn yield, or hedge their exposure to Bitcoin.