Bitcoin At $70K: Why Falling Treasury Yields Boost Spot BTC ETFs - iShares Bitcoin Trust (NASDAQ:IBIT)

Bitcoin’s return above $70,000 is doing more than reviving the crypto trade. It is also putting spot Bitcoin ETFs back in focus, as a sharp reversal in fund flows suggests institutional demand may be returning.

Bitcoin climbed more than 3% Thursday to touch $72,000, its highest level since June 1, according to Bloomberg, extending a roughly 7% gain from Wednesday. The rally followed the U.S. Treasury’s decision to expand purchases of longer-dated government bonds, pushing Treasury yields lower and the dollar to a three-month low.

The combination created a more favorable backdrop for Bitcoin. Lower yields reduce the relative appeal of fixed-income assets, while a weaker dollar supports the appeal of dollar-priced alternative assets. Bitcoin then got an additional boost from a major short squeeze, with more than $2.7 billion in crypto shorts liquidated over 24 hours, according to Bloomberg.

Confirmation Coming from the ETF Market

U.S. spot Bitcoin ETFs attracted $517.2 million on Wednesday, their biggest single-day inflow since May 4, according to data by SoSoValue.

BlackRock’s iShares Bitcoin Trust (NASDAQ:IBIT) led the rebound. The fund attracted roughly $284.7 million on Wednesday, while Fidelity Wise Origin Bitcoin Fund (BATS:FBTC) and ARK 21Shares Bitcoin ETF (BATS:ARKB) also posted significant inflows.