Wall Street investors have poured over $1 billion into spot Bitcoin ETFs this week, coinciding with the US dollar's persistent decline. As of June 25, these ETFs held 1.234 million BTC, up by more than 9,722 BTC over the past three days, according to Glassnode data. That amounts to roughly $1.04 billion in net inflows so far this week.
More than half of this week's inflows came on June 25, following a Wall Street Journal report that Donald Trump may announce a replacement for Fed Chair Jerome Powell as early as September. The US Dollar Index (DXY), which tracks the greenback's strength against a basket of foreign currencies, fell 1.23% since the WSJ report, hitting its lowest level since April 2022.
The dollar's decline comes as traders increase bets on Federal Reserve rate cuts later in September, with the odds of a 25 basis point reduction rising to 69% from 47.70% a month ago. Lower rates have historically dampened the appetite for the dollar, while increasing demand for non-yielding assets, such as stocks and cryptocurrencies. BTC's price has risen by over 2% to around $108,360 since the WSJ report, with ETF inflows further suggesting a growing risk appetite among retail traders and institutional investors.
According to Cointelegraph, the dollar is looking at a “do-or-die” scenario in July, which is bullish for Bitcoin. The increasing institutional adoption of Bitcoin ETFs suggests a shift in the perception of Bitcoin as a viable investment asset. Major Wall Street firms, including Goldman Sachs and Morgan Stanley, have played a pivotal role in this trend, with substantial investments in leading Bitcoin ETFs such as BlackRock's iShares Bitcoin Trust ETF.
This influx of capital from Wall Street could drive Bitcoin's price to new highs. Michael Saylor, Chairman of the Board at Strategy (formerly MicroStrategy), stated at the Bitcoin 2025 Conference that Bitcoin's price could reach $1 million if Wall Street holds 10% of the cryptocurrency. Wall Street's presence has brought in professional traders who are often better than retail investors at staying disciplined and not panic selling or buying out of fear of missing out. Their large positions have brought a bit of stability to Bitcoin markets—although it remains far more volatile than most assets.
However, some analysts caution that the increasing correlation between Bitcoin and American stocks could intensify price fluctuations. If stocks suffer a shock due to poor economic outlooks, Bitcoin could follow suit, amplifying market movements. Nevertheless, the long-term outlook for Bitcoin investments remains positive, with many investors viewing the cryptocurrency as a hedge against inflation and the devaluation of fiat currencies.
Overall, Wall Street's increasing involvement in the Bitcoin market marks a significant milestone for the cryptocurrency. While there are risks and challenges associated with this trend, the potential rewards are substantial. As Bitcoin continues to mature as an investment asset, it is likely to play an increasing role in investors' portfolios around the world.