Bitcoin ETF Inflows Drive Price Surge to New Year-to-Date High
Bitcoin (BTC) has experienced a bullish surge, reaching a new year-to-date high of $52,900 this week. This surge has been fueled by strong inflows into spot exchange-traded funds (ETFs). Several key factors, including rising investor demand for these ETFs, their positive impact on BTC price, and an overall shift in market sentiment, are contributing to this positive momentum.
Record Inflows into Spot Bitcoin ETFs
Spot Bitcoin ETFs have witnessed significant inflows in recent weeks. These ETFs recorded net inflows exceeding $2.2 billion for the second consecutive week between February 12th and 16th. This marks 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.
Role of ETF Inflows in BTC Price Recovery
Analysts believe that the inflows into spot Bitcoin ETFs are playing a crucial role in the digital asset’s recent price recovery. After a brief dip following the Consumer Price Index (CPI) data release, BTC has climbed steadily, reaching its highest point since December 2021. This uptrend coincides with the surge in ETF inflows, suggesting a potential link between the two.
BlackRock’s IBIT Leads Inflows, GBTC Sees Outflows
Among the various Spot Bitcoin ETFs, BlackRock’s iShares Bitcoin ETF (IBIT) has attracted a staggering $1.6 billion in inflows last week. Other notable performers include Fidelity’s Wise Origin Bitcoin Trust (FBTC), Ark Invest/21Shares’ ARKB, and Bitwise BTC Fund (BITB). However, Grayscale’s Bitcoin Investment Trust (GBTC) continues to experience outflows, with investors withdrawing $624 million last week.
Profitable BTC Supply Increases
As the price of Bitcoin rises, the portion of its supply held at a profit is also increasing. Currently, only 11% of the total BTC supply purchased above $50,000 is held at a loss. This indicates that a majority of Bitcoin holders are now in profit, potentially contributing to a more bullish market sentiment.
Increased Trading Volume
Trading volume in Spot Bitcoin ETFs reached nearly $2 billion last week, indicating growing interest in this market segment. This marks the highest total since the first day of trading on Jan. 11th and reflects significant activity within these ETFs.
Featured image from Pexels, chart from TradingView
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