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02/08/24
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Resurgence in Bitcoin ETF Inflows Signals Institutional Optimism Amid Price Volatility
Recent developments in the U.S. market for regulated spot Bitcoin exchange-traded funds (ETFs) indicate a recovery in inflows, following a challenging period that culminated in Bitcoin’s price hitting a six-month low of $53,500 on July 5. Data from analytics firms highlight that Bitcoin ETFs have been steadily increasing their BTC holdings, offsetting an initial dip in inflows experienced early in June. Since the beginning of July, this trend has accelerated, with inflows surpassing previous monthly averages.
On July 31, the Bitcoin spot ETF recorded a significant net inflow of $298 million, while other ETFs like the Grayscale mini ETF and BlackRock’s IBIT ETF noted inflows of $17.99 million and $20.99 million, respectively. Since being approved by the U.S. Securities and Exchange Commission in January 2023, Bitcoin ETFs have accumulated nearly 300,000 BTC. This ongoing accumulation, even during price stagnation, indicates a robust institutional demand for Bitcoin, with institutions now controlling about 9% of the total Bitcoin supply. Of this, ETFs comprise approximately 5.2%, while public companies hold around 1.6% and private entities account for at least 2%.
Despite Bitcoin’s recent inability to break the $69,000 resistance level and a slight decline of over 5% in the past day, market sentiment surrounding the cryptocurrency is turning increasingly optimistic. Recent observations show that bullish commentary around Bitcoin has surged to its highest level since mid-May, with many participants anticipating a potential rise to the $70,000 mark. Notably, a significant majority of traders on major exchanges are currently placing long positions on Bitcoin.
However, concerns about Bitcoin’s short-term price movement persist. If it fails to stabilize above the critical $64,200 level, which aligns with its 200-day exponential moving average, it may face downward pressure. As of now, Bitcoin is trading at $62,830, having experienced a modest increase of just 1.6% over the past month, reflecting a slight decline from last month’s gains.
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