As a seasoned researcher with years of experience tracking the cryptocurrency market, I’ve witnessed my fair share of market fluctuations and trends. The recent surge in Bitcoin’s price to a two-month high of $69,000 is a testament to the resilience and potential of this digital asset.
The significant increase in the value of Bitcoin nearing its two-month peak at $69,000 was largely driven by substantial investments into direct trading exchange-traded funds (ETFs) and an increased number of short position liquidations.
Currently, Bitcoin (BTC) is being exchanged at approximately $67,739, experiencing an increase of 0.6% over the past day. The market value of this asset is roughly $1.33 trillion, with a daily trading volume nearly reaching $30 billion, which propels its movement.
Short liquidations surge, fueling price rally
According to Coinglass data, it seems that rapid closure of short positions (selling Bitcoin with the expectation of buying it back later at a lower price) significantly contributed to Bitcoin’s recent price increase. In the last 24 hours alone, short liquidations amounted to $17.91 million, which is much higher than the $11.8 million in long liquidations (buying Bitcoin with the expectation of selling it later at a higher price). This imbalance underscores a common market phenomenon where closing short positions creates increased demand for Bitcoin, causing its price to rise and leading to more buying pressure.
Beyond regular market sell-offs, investments into U.S. Bitcoin ETFs have surged to substantial amounts. Over the last seven days, these ETFs reported five consecutive days of positive investment, accumulating over $2.12 billion. This pattern persisted into this week, with an additional $294.29 million poured in on Monday.
On October 24th, data from SoSoValue indicated that Bitcoin spot ETFs collectively experienced a net investment of approximately $188.11 million. Notably, BlackRock’s IBIT ETF was the main contributor, attracting an inflow of around $165.54 million. This represents the ninth consecutive day of investments into BlackRock’s ETF, with the fund accumulating close to $2 billion during this period.
Yesterday, I faced an outflow of approximately $25.2 million from Bitwise’s BITB ETF. However, today, it managed to attract inflows worth around $29.63 million, demonstrating a turnaround in its performance. On the flip side, Grayscale’s GBTC ETF saw an outflow of $7.05 million today, adding to the trend that has seen over $20 billion exit the fund since its launch.
Starting from the launch of the first Bitcoin Exchange-Traded Funds (ETFs) in January, the 12 currently accessible ones have garnered a combined $21.53 billion in net investments, a significant milestone that Bloomberg ETF analyst Eric Balchunas has termed as “the hardest metric” to attain within the ETF sector.
As a crypto investor, I can’t help but be impressed by the remarkable speed at which Bitcoin has reached such significant heights. It’s worth noting that gold ETFs took a full five years to amass the same value, underlining the increasing institutional appetite for Bitcoin investment. This rapid growth is truly something to behold!
Political tailwinds and potential policy shifts
In addition to current market behavior, the political climate in the U.S. is significantly impacting the feelings and decisions of investors as well.
Enthusiasm among Bitcoin investors is growing due to the speculation that Donald Trump might win the next presidential election. They are hopeful that a pro-cryptocurrency administration would boost blockchain technology development and ease regulatory hurdles.
The previous president’s standpoint, characterized by promoting a regulatory atmosphere favorable to blockchain technology and possibly nominating someone other than Gary Gensler as the SEC Chair, resonates strongly with many institutional investors who seek less stringent regulation.
The possible change may give Bitcoin’s price a further push, since it might lead to a more favorable regulatory climate that encourages the expansion of cryptocurrencies.
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2024-10-25 10:06