Bitcoin Retreats Following $3 Billion ETF Inflow Rally

Bitcoin Magazine

Bitcoin declined on Friday afternoon, taking a breather after a strong rally fueled by substantial purchases from U.S. ETF investors.

The top digital asset was changing hands at $77,379 in New York during the afternoon session, falling more than 3% over a 24-hour span.

Bitcoin reached a weekly peak of $81,281 but lost momentum after Federal Reserve Chair Kevin Warsh delivered his first major address as central bank head on Friday. He stated he had "more work to do" to combat inflation.

Historically, bitcoin has retreated when the Federal Reserve signals inflation remains elevated, as that reduces the likelihood of interest rate cuts. The cryptocurrency tends to perform better when borrowing costs are low.

JUST IN: U.S. Bitcoin ETFs have brought in $1.14 billion in inflows this week.

Over $3 billion has been added in the past 9 days! pic.twitter.com/ri1jE7enTZ

— Bitcoin Magazine (@BitcoinMagazine) August 28, 2026

Bitcoin began climbing last week after the U.S. Treasury indicated it would at least double the scale of its liquidity-support buyback operations. That announcement weakened the dollar while non-yielding assets gained ground.

Exchange-traded funds managed by firms such as BlackRock, Fidelity, and Grayscale have recorded net positive inflows for nine consecutive days, based on Farside Investors data. Last week represented their strongest week since October, when bitcoin reached a new record high, and that trend has carried into this week.

Since August 17, investors have directed more than $3 billion into these funds. BlackRock's iShares Bitcoin Trust captured the largest share of that capital, but Morgan Stanley's newly launched Bitcoin Trust, introduced this year, also saw notable inflows.

Analysts have noted that the debasement trade, where investors purchase assets to hedge against currency depreciation, was drawing renewed attention to bitcoin.

Participants in this trade view bitcoin, gold, and other precious metals as effective hedges against excessive government spending.

Total U.S. debt surpassed $40 trillion for the first time this month.