Bitcoin's $6.49 billion ETF rebound slowed in September ahead of the Fed's October meeting

Take August's $3.52 billion ^[6] and September's $2.80 billion ^[15] out of the quarter's total, using the SoSoValue figures Cryptopolitan cites, and July comes to about $170 million ^[1]. Nearly all of the quarter's Bitcoin ETF buying came in its last two months. The second of those months was about 20% smaller than the first ^[4].

Total net assets across the spot Bitcoin funds rose from $70.95 billion to nearly $108 billion ^[9], an increase of about $37 billion ^[2]. New money was $6.49 billion of that, about 17.5%. The remaining $30.5 billion or so came from the higher price of coins the funds already held ^[3]. A 42.71% gain on the opening $70.95 billion works out to about $30.3 billion ^[5], close enough to that residual to trust the split. Q3 was the first quarter of net inflows after three straight quarters of outflows ^[8], and the report does not give totals for those three.

Ether funds slowed faster. September's $892 million was about 48% of August's $1.85 billion ^{[15] [9]}, and taking both out of the quarterly total leaves roughly $368 million for July ^[7].

The Fed meets on Oct. 27-28 ^[14], and traders have already scaled back their October hike bets once ^[13]. Cryptopolitan argues that persistent inflation or a strong jobs report would keep Treasury yields and the dollar elevated, and that this has rarely been good for crypto ^[18].

October can go a few ways. If hike bets keep fading, flows could climb back toward August's pace. If they don't fade, flows could keep slowing while price holds on seasonality and on corporate buyers such as Strategy, back to buying Bitcoin during the quarter ^[11]. And a hawkish meeting could push Bitcoin through the $80,000 support identified in Cryptopolitan's chart analysis, which puts $87,400 and then $90,000 in play as targets if that level holds ^[16]. I'd expect the middle case. Both fund groups slowed in September before the Fed had said anything. And with roughly five-sixths of the Bitcoin funds' asset growth coming from price ^[3], the $80,000 level matters more to those balances than another month of flows. The counter-case is strong. September's $2.80 billion is about 16 times July's figure ^[8], and Bitcoin's median fourth-quarter return since 2013 is 26.59%, the best of any quarter on CoinGlass's table ^[17]. If October inflows come back above August's $3.52 billion and Bitcoin holds $80,000 through the meeting, the slowdown view is wrong.