Bitcoin Slips Below $65,000 as Strong ETF Inflows Clash With Fork Concerns

Bitcoin traded below $65,000 on Sunday, experiencing a slight decline as strong capital inflows into U.S. exchange-traded funds (ETFs) were counteracted by market apprehension over the controversial BIP-110 network fork.

ETF Flows Signal Renewed Interest

U.S. spot Bitcoin and Ethereum ETFs attracted a combined $1.1 billion in inflows last week, marking their best performance since April, according to a report from Investing.com. Despite this, overall trading activity remained near multi-year lows.

• Bitcoin Funds: In the five trading days ending Friday, Bitcoin funds amassed $853.5 million, the largest single-week inflow since April 17.
• Key Players: BlackRock's IBIT led the pack, contributing $693.7 million, or over 80% of the total. Fidelity's FBTC followed with $116.4 million in new capital.
• Ethereum Funds: Spot Ethereum ETFs also saw robust demand, pulling in $244.9 million and extending their positive inflow streak to five consecutive weeks.

However, the recent surge has not yet reversed the year-to-date trend. Since their launch in January, spot Bitcoin ETFs have seen a cumulative net outflow of approximately $4.44 billion, while Ethereum products have recorded net outflows of about $873 million.

Technical Concerns Weigh on Sentiment

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Offsetting the positive fund flow data are concerns surrounding the BIP-110 proposal, a contentious fork designed to limit non-payment data in Bitcoin transactions for one year. The fork's minority chain has effectively stalled due to a severe lack of computing power, or hash rate.

In an approximately eight-hour period, the forked chain produced only two blocks compared to 48 on the main Bitcoin network. Support for the proposal from miners is minimal, with only 2.53% of recent blocks signaling for it, far below the 55% threshold required for activation. This has created a high-risk environment, as the minority chain's low hash rate makes it unstable and exposes users to potential replay attacks, where a transaction on one chain could be duplicated on the other, potentially leading to the loss of actual BTC.

Broader Market Context

As of 4:54 a.m. ET, Bitcoin was priced at $64,800, down 0.28% over the previous 24 hours. Market demand had reportedly cooled ahead of the weekend following a surprise U.S. non-farm payrolls report that showed a loss of 23,000 jobs, contrary to expectations of an 80,000 gain.

The wider cryptocurrency market saw mixed performance in quiet Sunday trading. Ethereum (ETH) dipped 0.07% to $1,915.52, while Solana (SOL) gained 1.98% to trade at $76.28. Other major altcoins, including XRP and Cardano (ADA), posted minor losses.