Bitcoin Surges to $86,325 as US Spot ETF Demand Returns

Bitcoin's price surged to $86,325.44 by morning of October 2 as demand for US spot Bitcoin ETFs rebounded. This followed a day of net outflows on October 1, but the recovery indicates renewed buying interest in the market.

The rally beyond $85,000 comes ahead of the US jobs report on October 2, which will test whether Bitcoin can sustain its price above this threshold.

According to Farside Investors' ETF flow data, US spot Bitcoin ETFs recorded net inflows of $102.7 million on October 1, marking a recovery in demand after an outflow day. However, the positive aggregate concealed a mixed picture across products, with BlackRock's IBIT fund attracting money while Fidelity's FBTC fund and several other ETFs recorded redemptions.

As Bitcoin rises, losses on leveraged shorts can exhaust the collateral supporting them, leading to forced exits from bearish bets that accelerate an already rising market. The effect of this feedback loop helps a rally gather speed, but its impact fades as vulnerable positions close, leaving continued buying to determine whether the higher price holds.