Institutional Gold Rush as Bitcoin ETFs Absorb $246M Amid Dollar Weakness

The U.S. dollar (USD) against the Chinese yuan offshore (CNH) has experienced a notable decline in recent weeks, prompting shifts in the cryptocurrency market. The weakening of the USD/CNH exchange rate has been linked to broader macroeconomic developments, including political uncertainty in Asia and expectations of U.S. Federal Reserve rate cuts. As of late July and early September 2025, the USD/CNH pair has seen mixed performance, with some analysts noting that Chinese economic data, such as GDP and industrial production, exceeded expectations, providing support to the yuan [1]. However, the yen’s strength against the dollar following Japanese parliamentary elections also reflects a broader weakening of the greenback in the region [2].

The fluctuation in USD/CNH has had ripple effects in the crypto market. As the U.S. dollar softens, investors have shown increased interest in alternative assets, including cryptocurrencies. Ethereum (ETH), in particular, has maintained a dominant position in trading volume despite a recent consolidation phase. According to analyst Maartunn, Ethereum continues to outperform Bitcoin and other altcoins in terms of market activity, although its momentum has slowed compared to earlier highs [3]. The reduced volatility in ETH trading suggests a cautious environment, with many participants locking in profits and awaiting clearer signals for further moves.

Meanwhile, Bitcoin ETF inflows have surged, signaling renewed institutional demand in the digital asset space. In early September 2025, Bitcoin ETFs absorbed $246.42 million in net inflows, with BlackRock’s iShares Bitcoin Trust (IBIT) alone attracting $434.32 million [4]. These inflows contrast sharply with the outflows experienced by Ethereum ETFs, which lost $788 million in the same period. The divergence in ETF flows reflects a shift in investor sentiment, with institutions increasingly favoring Bitcoin as a safer digital asset during periods of macroeconomic uncertainty.

The weakening USD/CNH rate has also influenced corporate behavior in the crypto market. Strategy, a firm inspired by MicroStrategy’s Bitcoin treasury strategy, recently acquired 1,955 BTC, adding to its holdings and further absorbing newly mined Bitcoin. This action, combined with purchases by other institutional players, has altered Bitcoin’s supply dynamics. The firm’s Bitcoin treasury now holds over 638,460 BTC, valued at more than $71.6 billion, with a substantial profit margin. The absorption of new Bitcoin issuance by corporate treasuries has reduced the amount of circulating supply available to retail investors and traders, potentially contributing to upward price pressure.

On-chain data further highlights the contrast between institutional and whale behavior. Large Bitcoin holders, or whales, have been unloading coins at an accelerated pace since late 2022. Over the past month, more than 100,000 BTC have exited whale wallets, exerting downward pressure on the price. However, the strength of ETF inflows and institutional demand has provided a counterbalance, preventing significant corrections. This structural shift suggests that ETFs may increasingly dictate Bitcoin’s price action, especially if whale selling continues to outpace new supply entering the market [4].

Looking ahead, the U.S. Federal Reserve’s policy outlook remains a key factor influencing both traditional and digital asset markets. Recent labor data has fueled expectations of more rate cuts than initially projected, with some analysts speculating that monetary easing could drive Bitcoin toward $200,000 before the end of 2025 [4]. Ethereum, while maintaining strong fundamentals such as declining exchange reserves and whale accumulation, faces challenges from its inability to stake tokens within ETF structures, making it less attractive during risk-off periods. As the USD/CNH rate continues to trend lower and macroeconomic conditions evolve, the crypto market is likely to remain in a state of flux, with Bitcoin ETFs and institutional demand playing a central role in shaping price dynamics.

Source:

[1] USD/CNH | US Dollar Chinese Yuan Offshore (https://www.investing.com/currencies/usd-cnh)

[3] Ethereum (ETH) Price Today, News & Live Chart (https://www.forbes.com/digital-assets/assets/ethereum-eth/)

[4] Bitcoin ETF Inflows Hit $246M as BTC-USD Holds $112K (https://www.tradingnews.com/news/bitcoin-etf-inflows-surge-246m-usd)