Spot Bitcoin ETF Inflows Is A Metric To Monitor Closely
The CEO of JAN3, Samson Mow, believes that the influx of capital into Bitcoin-linked exchange-traded funds (ETFs) could have a significant impact on adoption and price in the coming months. Specifically, Mow emphasizes the importance of monitoring the spot Bitcoin ETF inflow metric. The United States Securities and Exchange Commission (SEC) recently approved several spot Bitcoin ETFs for the first time in over ten years.
According to Lookonchain data, eight spot Bitcoin ETFs purchased 4,160 BTC as of January 26. Meanwhile, Grayscale Investments, the issuer of Grayscale Bitcoin Trust (GBTC) shares, sold 9,932 BTC. The increase in institutional investors gaining exposure to Bitcoin through regulated ETFs could potentially drive prices up. However, traders are also keeping an eye on how quickly Grayscale Investments is shedding their GBTC shares and distributing them to spot Bitcoin ETF issuers, as this could impact prices.
Hash Rate Is Rising Even As Miners Dump BTC
Mow is also closely monitoring the hash rate of the Bitcoin network ahead of the upcoming halving event in April 2024. The hash rate measures the computing power dedicated to securing the blockchain. A higher hash rate typically indicates a healthier mining ecosystem and can boost investor confidence.
Currently, the Bitcoin hash rate stands at over 559 EH/s, slightly lower than its all-time high recorded in January 2024. Despite the rising hash rate, CryptoQuant data shows that miners have been selling their coins at spot rates. This ongoing liquidation by miners could contribute to a downtrend in prices if it continues.
Other Key Indicators to Watch
In addition to spot Bitcoin ETF inflows and the hash rate, Mow tracks macro indicators such as the United States M3 money supply, global adoption of Bitcoin, and real inflation. The M3 money supply and real inflation in the US have been relatively stable due to high-interest rates. However, if the Federal Reserve lowers interest rates in the future, these indicators could change.
Hot Take: Capital Flows and Miners’ Actions Shape Bitcoin’s Trajectory
Monitoring capital flows into spot Bitcoin ETFs and miners’ actions are crucial for understanding the trajectory of Bitcoin. The approval of spot Bitcoin ETFs by the SEC has attracted institutional investors, potentially driving up prices. However, the selling pressure created by Grayscale Investments offloading GBTC shares to spot Bitcoin ETF issuers could counteract this optimism.
Additionally, while the hash rate remains high, miners have been selling their coins, contributing to a downtrend in prices. It remains to be seen how these factors will continue to shape Bitcoin’s future. Keep an eye on these metrics to stay informed about the potential direction of the cryptocurrency.
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