Bitcoin ETF inflows drove September rebound but momentum fades
Bitcoin's September rebound was closely tied to inflows into spot Bitcoin ETFs, particularly BlackRock's iShares Bitcoin Trust (IBIT). A widely shared post over the weekend claimed BlackRock had bought around $1.6 billion of Bitcoin in September, but the figure actually reflects investor purchases of IBIT shares, not direct buying by BlackRock. The data, sourced from Arkham, tracks the Bitcoin held in custody wallets for the ETF, providing a snapshot of investor demand through this product.
The month saw dramatic shifts in inflows. On September 1, US spot Bitcoin ETFs lost $236.5 million, with IBIT accounting for $201 million of that. However, the tide turned just two days later, with IBIT taking in about $454 million on September 3. The middle of the month was weaker, with only about $6 million in net inflows during the week of September 14 to 18, following heavy withdrawals after the Senate failed to advance the CLARITY Act on September 15.
The late-month surge was particularly notable, with US spot Bitcoin ETFs absorbing $2.39 billion over five sessions from September 21 to 25. IBIT's $381.4 million on September 21 was the largest single-fund daily inflow of the year. However, the momentum faded towards the end of the month, with daily net inflows shrinking from $998.95 million on September 21 to just $31.07 million on September 28. Despite the inflows, Bitcoin ended the record week 2.3% lower, suggesting that the recovery may have lost steam.
The interpretation of these flows depends on future developments. If inflows pick back up and Bitcoin makes new highs above $87,000, it would strengthen the recovery case. Conversely, if inflows keep shrinking while the price drifts lower, it could indicate heavier selling elsewhere in the market. Breadth of demand across multiple funds, such as Fidelity's FBTC, which took $701.7 million during the record week, also matters. Watching daily flows, price response, and regulatory developments like the CLARITY Act will be key in the coming days.