Bitcoin ETFs are breaking records: 14,261 BTC were purchased in a single day, laying the foundation for a price rise
Bitcoin exchange-traded funds (ETFs) had a remarkable trading day on March 12 with a record-breaking purchase of 14,261 Bitcoins.
This number not only exceeds the initial enthusiasm seen when ETFs were introduced, but also sets a new high for market exposure. The method for calculating these Bitcoin purchases is to divide the daily inflow of funds by the average price of Bitcoin, highlighting the significant role of ETFs in the market.
ETFs staged a strong recovery following a decline in inflows that coincided with a drop in the price of Bitcoin. Current trends point to not just a recovery, but a continued increase in investment. This increase in demand for Bitcoin through ETFs, in contrast to the daily new supply from mining of around 900 Bitcoins, contributes to an upward movement in Bitcoin prices. This gap is expected to widen with the upcoming Bitcoin halving, which will reduce daily mining production to 450 Bitcoins.
In a post on LinkedIn on March 14, Clive Thompson, a former wealth management executive with experience in Swiss private banking, pointed to a possible connection between the increase in Bitcoin holdings through ETFs and the rise in the cryptocurrency price.
This suggests that ETF activity could play a crucial role in Bitcoin’s market movements. Despite price fluctuations, Bitcoin's overall trend remains positive, supported by a high Crypto Fear and Greed Index of 91, indicating strong market sentiment.
The market is currently being driven by two main factors: anticipation of the Bitcoin halving event, which is expected to usher in the next bull cycle, and ongoing interest in ETFs. Particularly significant was the launch of Bitcoin ETFs, which attracted institutional investment and increased the cryptocurrency's mainstream appeal.
According to Kaiko Research, liquidity depth in the Bitcoin market has reached a new high, with a significant imbalance between bid and ask prices on the order books, indicating a trend of profit-taking among traders. Nevertheless, high refinancing rates indicate continued demand for Bitcoin.
🚀 #BTC market depth, which measures the amount of bids and asks on BTC order books, has been on a steady upward trend over the past few months, reaching more than $600 million last week. pic.twitter.com/Sq2UTITGk9
— Kaiko (@KaikoData) March 11, 2024
The increasing interest of institutional and private investors in spot Bitcoin ETFs is having a noticeable impact. As Bitcoin ETFs reach nearly $60 billion in assets under management (AUM) and quickly close the gap with gold ETFs, which sit at around $98 billion, the momentum suggests a possible shift in investment preferences.
Bloomberg Intelligence's Eric Balchunas points out that all 10 Bitcoin ETFs are likely to outperform gold ETFs in AUM. WisdomTree's worst-ranked BTCW already has $74 million under management, placing it in the top 15% of the 108 ETFs launched in 2024, indicating strong market adoption and growth potential for Bitcoin ETFs.
I'm often asked on intvs if all ten BTC ETFs will survive, and the answer is 100% yes, they will all be here in a year. Even the smallest asset, $BTCW, has a whopping $74 million. It ranks 16th among the 108 ETFs launched so far in 2024. (top 15%). It's all so crazy. pic.twitter.com/ZVQ5ho3u2C
— Eric Balchunas (@EricBalchunas) March 13, 2024
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