Record-breaking inflows for Bitcoin ETFs push holdings to unprecedented peaks since July
In the past week, Bitcoin (BTC) has been experiencing a period of relative stability, with muted trading activity and high offshore leverage contributing to mixed directional signals. Despite this, the cryptocurrency market has seen a renewed momentum in Bitcoin Exchange-Traded Products (ETPs) inflows, which have surpassed the new supply of Bitcoin by a factor of 8.93 times.
The rise in Bitcoin ETP inflows can be attributed to several factors, including the renewed momentum driven by rate cut expectations and the recent crop of major crypto-related Initial Public Offerings (IPOs) and announcements. According to Bitwise analysts, these developments have contributed to an increase in risk appetite.
Last week, Bitcoin's exchange-traded products globally logged net inflows of 20,685 BTC, marking the strongest weekly intake since July 22. Fidelity's FBTC product, in particular, recorded an $843 million net inflow, accounting for 36% of the total $2.34 billion Bitcoin ETF demand and reaching an 18-month high.
The strength of Bitcoin since the ETF approvals earlier last year has been driven by ETF inflows, according to analysts at K33. In fact, the percentage share of Bitcoin's performance explained by changes in ETF flows has reached a new all-time high.
However, Bitcoin's seven-day volatility has hit yearly lows of less than 0.7% last week and has remained below 1.3% for 11 consecutive days, the second-longest such stretch this year. This indicates a lack of major immediate catalysts, a sentiment echoed by K33 analysts in an investor note.
The U.S. Bitcoin ETFs' combined holdings have also surpassed the previous peak set on July 30. Interestingly, compared with Ethereum ETF flows, there appears to be a 're-rotation' from Ethereum back to Bitcoin in terms of investor flows.
Despite the overall stability, Bitcoin's price has recently risen above $115,000, causing a modest increase in its seven-day volatility. This rise, coupled with the latest surge in ETF inflows, signals an acceleration in demand that could underpin further price support for Bitcoin.
It's important to note that no major immediate catalysts beyond Wednesday's FOMC meeting have been identified as potential drivers for Bitcoin price movement. High offshore leverage is another factor contributing to the muted trading activity in the Bitcoin market.
Despite the lack of specific information regarding the names of the Bitcoin ETFs that have accounted for a significant portion of Bitcoin ETP inflows in the last 18 months, the latest surge in ETF inflows is a clear indication of growing interest in Bitcoin as an investment asset.
In the last 30 days, investors accumulated roughly 22,853 BTC via various products, outpacing the new supply of 14,056 BTC. Bitcoin's implied volatility, which measures future market expectations using options data, is near a multi-year low, suggesting a continued period of stability.
In conclusion, while Bitcoin's price stability has been a major talking point in recent weeks, the renewed interest in Bitcoin ETFs and the surge in inflows suggest a growing confidence in the cryptocurrency as a viable investment option. However, with no major immediate catalysts on the horizon, the market remains tepid, with historically low volatility.
Read also:
- Deepwater Horizon Oil Spill: BP Faces Record-Breaking Settlement - Dubbed 'Largest Environmental Fine Ever Imposed'
- Lawsuit of Phenomenal Magnitude: FIFA under threat due to Diarra's verdict, accused of player injustice
- Successfully Transformed Setback into Thriving Food Truck and Restaurant Venture: Insights Revealed
- Fossil fuels remain the primary energy source for heating in Baden-Württemberg
