• Matt Hogan from Bitwise says that Bitcoin exchange-traded funds could attract massive inflows, surpassing their record number for 2024.

  • Bitcoin's rallies could extend further if strong ETF inflows continue in the fourth quarter.

  • Open interest in futures has also surged sharply, with traders showing a preference for long leverage.

Bitcoin (BTC) is trading near $122,000 on Thursday and may be on track for a strong fourth quarter amid a resurgence in institutional appetite for spot Bitcoin exchange-traded funds.

Bitcoin exchange-traded funds are expected to see strong inflows in the fourth quarter as institutional demand accelerates.

Bitcoin exchange-traded funds are on track to surpass their record number of $36 billion in 2024, according to Matt Hougan, Chief Investment Officer at Bitwise, in a note on Tuesday.

He explained that although current inflows appear modest, totaling only $22.5 billion in the first nine months of 2025, there is significant room for an increase by year-end.

Hougan wrote: "From what I see, the stars are aligned for a very strong quarter for inflows - more than enough to push us to a new record (and all-time high Bitcoin price)."

Hougan cited three key catalysts for a bullish fourth quarter for Bitcoin exchange-traded funds, including Bitcoin price returns, value reduction trading, and increased institutional approvals. He noted that Bitcoin is seeing further institutional recognition, as Morgan Stanley advised allocating up to 4% of Bitcoin for high-risk clients.

Another catalyst is that gold and Bitcoin are among the best-performing major assets this year, fueling what Wall Street has called a "value reduction trade." This term refers to betting on assets that thrive when fiat currencies lose value.

With the U.S. money supply expanding by 44% since 2020 and JPMorgan acknowledging the trend towards value reduction trading, Hougan suggests that the narrative is heading mainstream, benefiting Bitcoin.

He highlighted that the upside potential could fuel inflows into spot Bitcoin exchange-traded funds, noting Bitcoin's rise to an all-time high of $126,199 on Monday, supported by over $3.5 billion in ETF inflows last week.

The wave of inflows represents one of the strongest buying momentum since April, indicating renewed institutional appetite, according to on-chain analytics firm Glassnode in a report on Wednesday.

Glassnode mentioned that a sustained inflow trend between October and November could trigger additional Bitcoin rallies, as the fourth quarter is historically the strongest quarter for Bitcoin.

The recent increase in inflows pushed spot Bitcoin volume to its highest level since April, indicating increased liquidity and strength supporting the leading cryptocurrency's momentum.

The increase in spot Bitcoin volume was accompanied by a surge in open interest in futures, which reached nearly an all-time high of $50 billion as Bitcoin climbed above $120,000, according to Glassnode. Annualized funding rates also rose above 8%, reflecting strong demand for leveraged long positions and increased speculative momentum.

Glassnode noted that while the rise does not yet indicate overheating, a rise in funding costs has historically preceded short-term market corrections as excess leverage unwinds.

Bitcoin is trading near $122,000 on Thursday, with U.S. spot Bitcoin ETFs attracting over $2 billion in the past two days, paving the way for potential record inflows by the end of the week.

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