Wall Street Record Bitcoin ETF Inflows Coincide with Fed Rate Cuts Bets and US Dollar Weakness

Key takeaways

  • Wall Street poured over $1 billion into Bitcoin ETFs this week amid rising bets on Fed rate cuts and a weakening US dollar.
  • Trump’s early Fed replacement plans intensified dollar selloffs, pushing DXY to its lowest since April 2022.
  • Analysts warn July could trigger a major dollar breakdown, fueling Bitcoin’s rise toward new highs.

Wall Street investors have poured over $1 billion into spot Bitcoin (BTC) ETFs this week. These inflows occur alongside a persistent decline in the US Dollar.

As of Wednesday, US spot Bitcoin ETFs held 1.234 million BTC. This represents an increase exceeding 9,722 BTC over the past three days, equaling roughly US$1.04 billion in net inflows.

The majority of these weekly inflows occurred on Wednesday. This was following a Wall Street Journal report detailing President Donald Trump’s possible early replacement for Fed Chair Jerome Powell.

The US Dollar Index (DXY) has dropped 1.23% since the Wall Street Journal report. This represents its lowest level since April 2022.

Traders are increasing their expectations for Federal Reserve rate cuts later this month. The likelihood of a 25 basis point cut at the September 17th meeting increased from 47.70% one month ago to 69%.

Lower interest rates have historically reduced the dollar’s appeal. At the same time, they have driven demand towards non-yielding assets like stocks and cryptocurrencies. Consequently, BTC’s price climbed over 2% following the Fed-related news, reaching around $108,360.

Dollar’s Critical Support near 97.5 Could Signal ‘Do-or-Die’ Scenario for Dollar

DXY faces a potential critical support zone near 97.50. This suggests a “do-or-die” scenario in July, according to chartist Sven Henrich.

Multiple support levels (both lower trendlines of multiyear/long-term descending channels) appear near this crucial area.

“Break below ~97.5, and the next level of structural support may not come in until the low 90s,” according to Linq Energy. Analysts further noted, “If the dollar cracks, expect serious implications for commodities, gold, and EM flows. July could set the tone for 2H macro.“

Furthermore, analyst Lark Davis described the potential dollar breakdown as investors “suck[ing] up BTC off the market like a f***ing vacuum.”

Chartists Predict Bitcoin Could Soar to $150,000 as Dollar Weakens

Dollar weakness, potentially stemming from higher supply growth and declining interest rates, is stimulating investment in Bitcoin.

Several technical analysts predict Bitcoin could significantly increase. Multiple chartists see Bitcoin potentially hitting the $150,000 mark by the end of 2025.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.