Inflows from Spot Bitcoin ETFs Drive BTC Price Surge
The recent surge in Bitcoin’s price, surpassing $50,000 and reaching over $52,000, can be attributed to the inflows from new spot Bitcoin exchange-traded funds (ETFs). According to Bitcoin investor Marc van der Chijs, ETF issuers are purchasing 10-12 times more BTC than is produced daily, resulting in a 2% price increase of approximately $1,000 per day.
Impact of ETFs on BTC’s Price
Chijs’ analysis reveals that most price increases occur during the settlement period before the U.S. market opens. As the inflows significantly exceed the newly produced BTC, users have been selling their holdings to fulfill the ETF orders. These sales often occur at higher prices, creating a fear of missing out (FOMO) among ETF investors and driving up demand and USD valuations.
Chijs predicts that each trading day will likely see an average increase of $1,000 over the next few weeks.
Incoming Supply Shock
Chijs highlights two upcoming events that could further boost BTC’s price in the next three months. Firstly, the Bitcoin halving event in April will reduce miners’ block rewards by half, leading to a decrease in daily BTC production from 900 BTC to 450 BTC. This reduction in supply is expected to drive up prices as ETF issuers scramble to increase their holdings.
Additionally, the sale of shares of new ETFs usually begins after 90 days of trading. With the launch of these products in January, Chijs anticipates increased demand by early May, which will positively impact BTC’s price.
“This means that unless there is a black swan event we will see a new all-time high (> $69K) before the halving and we could possibly hit $100K in the next 2-3 months already,” Chijs stated.
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