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ETF Inflows Continue to Bolster Bitcoin

By Matteo Greco, Research Analyst at the publicly listed digital asset and fintech investment business Fineqia International (CSE:FNQ). 


Bitcoin (BTC) ended the week at approximately $52,150, showing a notable 7.9% increase from the previous week’s closing value of around $48,300. The week began with robust price growth, with BTC reaching its peak trading price of around $52,800 on Thursday, before stabilizing over the weekend within the $51,000 to $52,000 range and ultimately closing slightly above $52,000.

Last week marked Bitcoin’s return to trading above $50,000 for the first time in over two years, signaling strong momentum following the approval of BTC ETFs Spot. The last time BTC traded above $50,000 was back in December 2021, immediately following its all-time high of $69,000 in November of the same year. This period was retrospectively recognized as the onset of a significant downtrend that persisted throughout 2022, leading to a price decline to approximately $16,000 by the end of that year.

Market momentum continued to be fueled by the high demand for BTC ETFs Spot. Throughout last week, the cumulative net inflow into BTC ETFs totaled about $2.3 billion, nearly doubling the $1.2 billion recorded in the previous week, and accounting for almost half of the total net inflow since inception, which currently stands at roughly $5 billion.

Net inflows have remained consistently positive for 16 consecutive trading days since January 26th. However, outflows from the Grayscale Bitcoin ETF (GBTC) saw a slight increase last week, reaching approximately $625 million, marking a 50% rise compared to the cumulative outflow of $415 million recorded in the preceding week. This suggests an uptick in profit-taking by investors following the recent surge in BTC price.

Among the 9 ETFs launched on January 11th, Blackrock Bitcoin ETF (IBIT) maintains its lead with over $5 billion in assets under management (AUM), currently totaling around $6.2 billion. Fidelity BTC ETF (FBTC) follows in second place with approximately $4.5 billion AUM, while 21Shares & ARK Bitcoin ETF (ARKB) secures the third position with roughly $1.5 billion AUM. Last week, a fourth ETF crossed the $1 billion AUM milestone, with Bitwise Bitcoin ETF (BITB) reaching approximately $1.2 billion AUM.

Trading volume remained robust, with the cumulative trading volume of BTC ETFs reaching about $9.6 billion last week, boasting a daily average volume of over $1.9 billion. Since January 11th, the cumulative trading volume has totaled $45.3 billion, with an average daily volume of approximately $1.7 billion. These figures indicate above-average trading volume for the week, underlining strong buy pressure and activity surrounding these ETFs.

Analysing the macroeconomic landscape, the upcoming Federal Open Market Committee (FOMC) meeting is now 30 days away. Market expectations suggest a 90% probability of no change in rates, with the first 25bps cut still anticipated for some time between the end of Q2 and the beginning of Q3 this year. This expectation fuels the anticipation for a less restrictive monetary policy from the FED, increasing risk exposure that market participants are willing to undertake. This contributes to the robust momentum of risk assets such as BTC, cryptocurrencies, and stocks, with the S&P 500 recently achieving a new all-time high.

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