The Bitcoin market is witnessing a significant resurgence in interest from US investors, as recent data reveals an abrupt turnaround in ETF inflows and on-chain metrics. This development follows a turbulent close to 2024, driven by macroeconomic pressures and shifting Federal Reserve policies.
ETFs Reflect Renewed Investor Confidence
The latest shift in Bitcoin investment patterns began after the Federal Open Market Committee (FOMC) wrapped up its final meeting for 2024. Federal Reserve Chair Jerome Powell warned that inflationary challenges in 2025 could limit interest rate reductions, leading to an immediate sell-off in risk assets, including Bitcoin.
Over the subsequent four trading days, US investors withdrew more than $1.5 billion from Bitcoin exchange-traded funds (ETFs), with December 27, 30, and January 2 showing notable outflows.
Despite this bearish period, a dramatic reversal occurred on January 3, 2025. Bitcoin ETFs recorded a combined net inflow of $908.1 million, marking their best performance since November 2024.
Fidelity’s FBTC fund led the recovery, attracting $357 million in new investments, followed by BlackRock’s iShares Bitcoin Trust (IBIT) with $253.1 million. Ark Invest’s ARKB fund also rebounded strongly, pulling in $222.6 million.
This influx suggests that investors are re-evaluating Bitcoin as a strategic asset amid ongoing economic uncertainties. The rapid recovery in ETF investments reflects a growing confidence in Bitcoin’s resilience and its long-term value proposition as a hedge against traditional financial market volatility.
Coinbase Premium Index Signals Market Sentiment Shift
Supporting this trend is the rebound in the Coinbase Premium Index, a key on-chain metric that gauges the price difference for Bitcoin on US-based Coinbase versus Binance. A positive index value typically indicates heightened accumulation by US investors, while a negative value signals selling pressure.
Following the FOMC meeting, the index plummeted to its lowest point in 2024, aligning with the sharp ETF outflows.
However, CryptoQuant data shows a quick recovery to neutral levels shortly after the outflows subsided. This shift underscores renewed buying interest among institutional and retail investors in the US, signaling a potential stabilization of the market.
The synchronicity between the ETF inflows and the Coinbase Premium Index recovery points to a coordinated resurgence in demand for Bitcoin among US investors. As the new year unfolds, these indicators highlight a renewed commitment to Bitcoin as a vital asset in diversified portfolios, despite the uncertain macroeconomic environment.
