Institutional investors have injected more than $1 billion into spot Bitcoin ETFs this week, aligning with a weakening US dollar that’s approaching a pivotal moment.
Trump’s Fed Comments Spark $500M+ Inflows in a Day
According to Glassnode data, spot Bitcoin ETFs now hold approximately 1.234 million BTC — a jump of over 9,700 BTC in just three days. This equates to about $1.04 billion in net inflows, with Wednesday alone accounting for more than half of the total.
The surge in inflows followed a Wall Street Journal report suggesting that former President Donald Trump could seek to replace Federal Reserve Chair Jerome Powell by September.
Meanwhile, the US Dollar Index (DXY) has dropped 1.23% since the report, reaching lows not seen since April 2022. This decline reflects growing market expectations for interest rate cuts, with the probability of a 25 basis point reduction in September now at 69%, up from 47.7% a month ago.
Historically, falling interest rates reduce demand for the dollar while boosting interest in risk assets such as equities and cryptocurrencies. Bitcoin has gained over 2%, trading around $108,360 as investor appetite for digital assets appears to be growing once again.
Dollar Faces Critical Test — Bullish for Bitcoin?
According to Sven Henrich, founder of NorthmanTrader, the dollar is nearing a “make-or-break” level as the DXY tests a key support zone near 97.50 — a confluence of major trendlines dating back several years.
Analysts from Linq Energy echoed this concern, stating:
“If the DXY breaks below ~97.5, the next strong support might not appear until it hits the low 90s. That could send shockwaves across commodities, gold, and emerging markets.”
Analyst Lark Davis noted that if the dollar continues to slide — especially alongside an expanding M2 money supply — institutions may start absorbing available Bitcoin rapidly, comparing the behavior to “a vacuum sucking it off the market.”
With this backdrop, some analysts are projecting a bullish long-term outlook, with Bitcoin potentially reaching $150,000 or more by the end of 2025.
