Bitcoin Sinks on Fed Hike Expectations as ETF Inflows Reach $3.52 Billion

Bitcoin (BTC-USD) opened Tuesday at $78,571 on Bitstamp, but failed to sustain its gains and settled near $77,832, a 0.93% drop from the daily open.

The price action was largely driven by expectations of a Federal Reserve interest rate hike, with CME FedWatch putting a 25 basis point September hike at 66.4%, up from 39.6% just one week ago.

Despite this, Bitcoin-denominated futures open interest fell to a five-month low during the move in August, indicating that short liquidations and position closures supplied the buying rather than fresh long capital.

The $3.52 billion influx of US spot Bitcoin ETFs in August is also a crucial factor to consider, with BlackRock's iShares Bitcoin Trust (IBIT) pulling in $938 million during the week of August 24-28 alone.