Bitcoin ETFs Surpass $20 Billion Milestone Amid Price Downtrend

Cryptonews Nia Simpson October 17, 2024

Bitcoin ETFs Surpass $20 Billion Milestone Amid Price Downtrend

On October 17, spot Bitcoin ETFs in the United States reached $20 billion in total net flows even while Bitcoin’s price remains under pressure, having not surpassed $68,300 since June. This milestone was achieved in just ten months, showcasing strong investor interest compared to gold ETFs that took five years to reach similar levels. Additionally, recent ETF inflows signal a potential upcoming rally in Bitcoin’s price based on historical performance during halving years.

Recent developments indicate that spot Bitcoin exchange-traded funds (ETFs) in the United States have achieved a remarkable milestone, reaching a total of $20 billion in net flows as of October 17. This growth in net flows is noted despite the prevailing downtrend in Bitcoin’s price, which has remained below $68,300 since June 2023, resulting in a decline that has persisted for seven months, according to data from Cointelegraph. Eric Balchunas, a senior ETF analyst at Bloomberg, commented on this achievement, stating that reaching the $20 billion mark is the “most difficult metric to grow” for ETFs. Notably, US-based spot Bitcoin ETFs accomplished this feat in just ten months, contrasting significantly with gold ETFs, which took approximately five years to achieve similar net flows. After experiencing three consecutive days of net negative outflows, Bitcoin ETFs began to see a surge in inflows starting October 11, bringing in over $253 million in cumulative net inflows over a four-day span. Data from Farside Investors reveals that the US ETFs accumulated more than $458 million in Bitcoin on October 16, contributing to a cumulative total of $65.4 billion in on-chain Bitcoin holdings, thereby accounting for approximately 4.9% of the current Bitcoin circulating supply as reported by Dune. Additionally, some analysts express optimism regarding a potential rally in Bitcoin’s price, forecasting an increase to $92,000 in the forthcoming months, drawing from historical patterns and average monthly returns experienced during Bitcoin halving years. Historically, October has shown an average return of 21.47%, with November boasting the best performance at 46.8%. During the previous halving in 2020, Bitcoin’s price notably rose over 27% in October and over 42% in November, marking the beginning of a six-month bullish trend that extended into March 2021.

The significance of Bitcoin ETFs lies in their ability to provide a regulated and accessible mechanism for investors to gain exposure to Bitcoin without directly purchasing the cryptocurrency. The attainment of $20 billion in net flows marks a pivotal moment for both the market and potential regulatory movements surrounding cryptocurrencies. The current downtrend in Bitcoin’s price reflects broader market sentiments and investor caution, amidst increasing regulatory scrutiny and market fluctuations. Historically, Bitcoin has shown patterns of recovery and growth following prolonged downtrends, particularly in halving years, when the supply of new Bitcoin is reduced, often leading to increased demand and price appreciation.

In conclusion, as Bitcoin ETFs have achieved a critical milestone of $20 billion in net flows amidst a downtrend in Bitcoin’s price, this reflects significant investor confidence and interest in cryptocurrency investment vehicles. The contrasting performance relative to gold ETFs underscores the rapid growth of Bitcoin as an asset class, despite prevailing market challenges. Analysts remain hopeful for a potential price rally in the coming months, reminiscent of prior historical trends observed during halving years. The evolving landscape of Bitcoin ETFs will continue to be a focal point for investor engagement and market dynamics.

Original Source: www.tradingview.com