China’s Capital Injection and the Increase in Demand for Bitcoin ETFs

Although Bitcoin (BTC) is trading at $63,000, down 1.4 percent in the last 24 hours, the cryptocurrency is up 2 percent on a weekly basis as inflows into BTC exchange-traded funds (ETFs) remain positive.

Asian stocks rose after China said it was considering injecting 1 trillion yuan ($142 billion) of capital into the country’s biggest banks to boost their ability to support the economy.

The announcement came after the People’s Bank of China (PBOC) cut the reserve requirement ratio for mainland banks by 50 basis points (bps) and the seven-day reverse repo rate by 20 basis points to 1.5%.

SoSoValue data shows that total daily net inflows for BTC ETFs exceeded $100 million for the second day in a row, marking a fifth straight day of positive net inflows for the funds.

According to data from CryptoQuant, current developments have turned the indicator tracking 30-day net assets positive for the first time in September, highlighting a growing trend of accumulation as opposed to sales.

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Ether (ETH) is trading above $2,500, down 1.3% on the day and up 8% on the week. Data shows that spot ETH ETFs had a net daily inflow of $43 million, marking the second day in a row that net positive inflows have been recorded.

Presto Research noted that Ethereum gas fees, which have increased due to network congestion, coincided with ETH outperforming BTC following the Fed’s 50 basis point rate cut.

Presto said that while on-chain yields remain below the three-month treasury note, some investors are positioning for a potential recovery in total value locked (TVL). However, a broader capital exodus may not occur until 2025.