Bitcoin (BTC) has surged significantly, reaching a new year-to-date pinnacle of $52,900 this week, propelled by substantial inflows into spot exchange-traded funds (ETFs). Analysts attribute this notable upswing to various pivotal factors, including escalating investor interest in these ETFs, their favorable impact on BTC price dynamics, and an overarching shift in market sentiment.
This surge in BTC’s value has led to the highest weekly inflow ever recorded for Bitcoin ETFs, surpassing any other exchange-traded product among the 3,400 currently trading in the United States.
Analysts contend that these inflows are playing a pivotal role in the recent recuperation of the digital asset’s price. Following a transient decline subsequent to the release of the Consumer Price Index (CPI) data, BTC has demonstrated a steady ascent, reaching its zenith since December 2021. This upward trajectory aligns with the surge in ETF inflows, suggesting a plausible correlation between the two phenomena.
BlackRock’s IBIT Leads the market , Grayscale’s GBTC Experiences Outflows
Spot Bitcoin ETFs Witness Unprecedented Inflows, Catalyzing Price Rebound
Spot Bitcoin ETFs, which directly mirror the price of the cryptocurrency, have observed noteworthy inflows in recent weeks. As per a report by Bitfinex Alpha, these ETFs garnered net inflows surpassing $2.2 billion for the second consecutive week between February 12th and 16th.
Among the myriad Spot Bitcoin ETFs, BlackRock’s iShares Bitcoin ETF (IBIT) has emerged as the frontrunner, attracting an astonishing $1.6 billion in inflows last week. This elevates IBIT’s year-to-date inflows to an impressive $5.2 billion, constituting nearly half of BlackRock’s total net inflows across all their ETFs.
GBTC has $7bil outflows in past 5 weeks…
What a chart.
Outflows clearly slowing.
Interested to see what happens moving forward.
Play for Grayscale IMO is to launch “mini-GBTC” (spot bitcoin ETF at significantly lower fee). SPDR did this w/ GLD & GLDM.
via @biancoresearch pic.twitter.com/NrZnqzUiAi
— Nate Geraci (@NateGeraci) February 19, 2024
Other commendable performers encompass Fidelity’s Wise Origin Bitcoin Trust (FBTC) with $648.5 million, Ark Invest/21Shares’ ARKB with $405 million, and Bitwise BTC Fund (BITB) with $232.1 million in inflows.
However, Grayscale’s Bitcoin Investment Trust (GBTC) continues to grapple with outflows, with investors withdrawing $624 million last week. This downward trend has persisted since the U.S. Securities and Exchange Commission (SEC) endorsed GBTC’s conversion from an over-the-counter product to an ETP in January, resulting in a depletion of over $7 billion in capital.
Growing Profitable BTC Supply Bolsters Market Sentiment
Concomitant with the surge in BTC’s price, the percentage of its supply held at a profit is also on the rise. Presently, only 11% of the total BTC supply, procured above $50,000, is held at a loss. This indicates that a majority of Bitcoin holders are now in profit, conceivably contributing to a more bullish market sentiment.
Increased Interest Reflected in Trading Volume
The Nine had biggest volume day since Day One with about $2b in combined trading thx to big contributions from $HODL, $BTCW and $BITB which all broke their personal records. For context $2b in trading would put them in Top 10ish among ETFs and Top 20ish among stocks. It’s a lot. pic.twitter.com/547pIl5grI
— Eric Balchunas (@EricBalchunas) February 20, 2024
Furthermore, the burgeoning interest in Spot Bitcoin ETFs is underscored by the trading volume, which approached nearly $2 billion last week, as reported by Bloomberg Intelligence senior ETF analyst Eric Balchunas. This represents the highest total since the inaugural trading day on January 11th, underscoring significant activity within this market segment.
