Bitcoin (BTC) ETF Investors Bought the Dip on Friday, With Inflows Topping $140M

The price of the world's largest crypto has seen a very modest bounce since tumbling below $54,000 early Friday.

U.S. investors piled into bitcoin (BTC) exchange-traded funds (ETFs) on Friday as the price of the world's largest cryptocurrency showed a muted recovery following a 10% drop earlier in the session.

After returning to their screens following the July 4 break, traders were presented with a historic plunge in bitcoin that saw its price fall more than 10% from the pre-holiday level. But based on the ETF data, they decided to bid the offer.

U.S.-based spot bitcoin ETFs saw a net inflow of $143.1 million on Friday, the highest level of inflows in at least two weeks, according to numbers compiled by Farside Investors.

Leading the way was Fidelity's Wise Origin Bitcoin Fund (FBTC), which saw a net inflow of $117.4 million. Other funds with net inflows were the Bitwise Bitcoin ETF (BITB), the ARK/21 Shares Bitcoin ETF (ARKB) and the VanEck Bitcoin Trust (HODL).

Meanwhile, the high fee Grayscale Bitcoin Trust (GBTC) continued to see outflows, to the tune of $34.4 million. Grayscale, which is owned by Digital Currency Group, also owns CoinDesk.

As for price action, bitcoin has seen a very modest bounce from tumbling from nearly $61,000 on Wednesday to under $54,000 early Friday, currently trading back to $56,800. That's down 6% from the week-ago levels and roughly 23% from its all-time high above $73,500 set in mid-March.

The latest downdraft in price was driven by concerns over a massive surge in supply as trustees for defunct exchange Mt. Gox began returning 140,000 bitcoin to former customers and the German government moved to sell at least some of the thousands of bitcoin it acquired in recent years.

The returning Mt. Gox coins are set to hit the market over the next few months, and the government sales could also take place gradually. But the combined total is roughly equivalent to 7% of bitcoin's current circulating supply, so any rapid sell-off could quickly overwhelm demand.

Bitcoin has now fallen about 40% from its record high, a move that technical analysts say could herald the start of a bear market. But others say that the downturn is likely to prove short-lived, especially given the continued institutional interest in the cryptocurrency.

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