US spot Bitcoin and Ethereum exchange-traded funds recorded a combined $706.34 million in inflows on August 19 as the market staged a recovery.
Bitcoin also climbed back above $72,000 on Thursday, while Ether gained about 20%, reclaiming $2,000 and pushed above $ 2,200, according to CoinGecko data. Meanwhile, the broader crypto market capitalisation also rose by more than 7% to about $2.45 trillion.
The latest rebound was supported by a number of factors, including the US Treasury’s decision to increase long-term debt buybacks to at least $4 billion per operation from September, which eased pressure on the bond market and improved sentiment across risk assets.
This was followed by a White House meeting with crypto industry executives that added to expectations that Washington is moving toward a more favourable regulatory approach to digital assets.
Institutional Demand Is On the Rise
Institutional demand is showing signs of returning to the crypto market, with spot Bitcoin ETF inflows building steadily over the past few sessions. Spot US Bitcoin ETFs took in about $297.6 million on August 17, followed by another $189.3 million on the day after, bringing the two-day total to nearly $487 million.
The pace picked up further on August 19, when inflows reached $517.19 million, with eight of the 12 funds ending the session in positive territory according to data from SoSoValue.
BlackRock’s iShares Bitcoin Trust (IBIT) led Bitcoin ETF inflows with $284.70 million, followed by ARK Invest and 21Shares’ ARKB with US$77.70 million and Fidelity’s FBTC with $62.40 million. Bitwise’s BITB also attracted $35.60 million, while Grayscale’s GBTC brought in $21.20 million and Morgan Stanley’s MSBT recorded $10 million.
Ethereum ETFs also posted strong inflows, with $189.15 million entering the products. Leading the gainers was BlackRock’s ETHA with $122.10 million, followed by Fidelity’s FETH with $36.50 million and Grayscale’s Ethereum Mini Trust with $16 million. BlackRock’s staking product also added $9.70 million, while Morgan Stanley’s MSSE recorded $2.25 million.
Crypto Market Rebounds as ETF Inflows Surge
The combination of improving macro conditions and renewed institutional buying has resulted in a major rebound across the markets.
The size of that move, however, cannot be explained by spot ETF flows alone. More than $1.44 billion in short positions were also liquidated as prices moved higher, forcing traders who had bet on further declines to close their positions.
ETF inflows poured fresh capital into spot markets, increasing prices and putting pressure on leveraged shorts. As those positions reached the liquidation point, forced buybacks further increased demand, making a feedback loop that drove prices higher and led to more liquidations.
Bitcoin’s move towards $72,000 also puts the latest ETF activity into context. The latest inflows came as the asset posted its third consecutive day of gains, while total ETF net assets reached about $84.31 billion. Ether’s session also arrived alongside its strongest daily move, which was a major reversal from the weaker flows recorded earlier in August.
The next test is whether Bitcoin can establish the $68,000-$70,000 range as support. Analysts have said that the range will be a key level for confirming whether the latest move is simply a temporary bounce driven by short liquidations or a broader recovery.
Meanwhile, the Crypto Fear & Greed Index has since risen to 62, moving into “Greed” territory from 46 a day earlier amid strong bullish momentum.
About The Author
