CoinShares: Bitcoin fund flows trade Fed rate path, not exit market

Bitcoin fund flows — Bitcoin’s struggle to break $80,000 is tied to shifting expectations for U.S. interest rates, with crypto fund flows showing investors are trading monetary policy rather than exiting the asset class, according to CoinShares research.

CoinShares head of research James Butterfill stated that “Bitcoin is trading like gold again, but the Fed still sets the ceiling” around $80,000. The analysis highlights that digital asset investment products saw roughly $100 million in outflows immediately after a hawkish Fed speech in late August, which increased market expectations for a September rate hike.

Those flows reversed the following week, with net inflows reaching $1 billion by September 4, coinciding with more dovish commentary from another Fed official. Butterfill concluded that “investors are not exiting the asset class. They are trading the rate path.” As of Monday, Fed Funds futures implied a roughly 60% chance of a rate hike at the upcoming FOMC meeting.

The movements underscore Bitcoin’s continued sensitivity to liquidity and monetary policy conditions. The report also noted that recent U.S. Treasury bond buyback announcements have added to the liquidity backdrop, contributing to Bitcoin’s rally from the low $60,000s last month.