Bitcoin ETFs See $2.4B Inflows as China ETFs Face Historic Outflows

Bitcoin ETFs are seeing strong growth, with $2.42 billion in inflows during the week of November 18–22, 2024, marking their fourth-largest inflow week since their debut in January. This surge in investment follows a significant price rally in Bitcoin (BTC), which breached $99,000 for the first time, spurred by the aftermath of Donald Trump's 2024 presidential election win. During this period, Bitcoin saw its largest monthly candle, a gain of over 40%.

The increasing inflows into Bitcoin ETFs signal growing institutional interest, while the opposite trend is unfolding in China-based ETFs. Over the same week, China ETFs experienced record outflows of more than $2 billion, highlighting a stark contrast in investor sentiment. According to a November 22 post by the Kobeissi Letter, this marks the largest weekly outflow in history for Chinese funds, with the iShares China Large-Cap ETF (FXI) seeing $984 million in withdrawals alone.

China’s Economic Woes and Global Bitcoin Adoption

Despite aggressive economic stimulus measures by China to counter a weakening economy, investor confidence remains low. The Kobeissi Letter reports that consumer sentiment in China has plummeted by nearly 50 points over the past three years, a drastic decline that has not been seen in decades. This worsening economic outlook is pushing investors away from Chinese assets and toward alternatives like Bitcoin, which is benefiting from growing concerns in traditional financial markets.

Bitcoin’s price action has historically surged in times of economic uncertainty, particularly during banking crises. The March 2023 US banking crisis was a key catalyst for the bullish momentum that propelled Bitcoin’s price higher last year, according to Arthur Hayes, BitMEX co-founder and former CEO.

Bitcoin Price Soars Amid ETF Inflows and Record Stablecoin Activity

As Bitcoin ETFs continue to break records, Bitcoin's price continues to climb. On November 22, Bitcoin hit a new all-time high of $99,800, marking a 9.5% increase during the past week. This increase comes as Bitcoin ETFs surpassed the $100 billion net asset milestone, reflecting strong investor confidence. Over the same period, China’s FXI ETF dropped over 3%, and on the monthly chart, Bitcoin saw a 48% rise, while the FXI lost more than 7%.

This rally is further fueled by an unprecedented $9.7 billion in stablecoin inflows to exchanges, with some predicting that Bitcoin will break the $100,000 mark before the end of November. However, some experts, including Kris Marszalek, co-founder and CEO of Crypto.com, have cautioned that the market may need to undergo a deleveraging phase before Bitcoin can sustain a price above $100,000.

In summary, while Bitcoin’s price continues to benefit from economic concerns and shifting investor sentiment, especially in China, the sustainability of the rally remains a topic of debate. The growing interest in Bitcoin ETFs and the ongoing outflows from Chinese funds highlight a global shift toward cryptocurrency as a hedge against uncertainty.