Crypto ETF Demand Reverses Course on Friday

The week that was for crypto ETFs saw a dramatic turnaround from heavy losses to significant gains. The sector had been battered by policy shocks, including the Senate's failed cloture vote on the Digital Asset Market Clarity Act and the Federal Reserve's interest rate hike. However, the tide turned on Friday with a $433.03 million surge in demand for Bitcoin funds, leaving them with a slim $6.21 million inflow for the week.

The outflow had reached over $426 million at one point during the week, but investors returned to the market on Friday, driven by Blackrock's IBIT, which finished the week with $120.66 million in net inflows. Fidelity's FBTC added $79.9 million, while Morgan Stanley's MSBT gained $13.2 million.

Bitcoin's price also recovered sharply late Friday, reclaiming $80,000 before extending its advance after U.S. ETF markets closed. Ether struggled more, however, with ETFs posting $140 million in weekly net outflows, ending four consecutive positive weeks.