Bitcoin Struggles to Surpass $70K Despite $20 Billion in ETF Inflows

Cryptonews Politics Clara Montgomery October 21, 2024

Bitcoin Struggles to Surpass $70K Despite $20 Billion in ETF Inflows

Bitcoin has not surpassed $70,000, despite hitting a milestone of $20 billion in spot ETF inflows. Analysts suggest that these inflows may take days to influence Bitcoin’s price. After peaking at $69,487, Bitcoin retracted to $68,570. Positive sentiment follows a weekly close above $69,000, with analysts noting the importance of sustained market interest for significant price movement.

Currently, Bitcoin remains below the $70,000 threshold, notwithstanding a significant milestone reached last week in spot Bitcoin exchange-traded funds (ETFs). On October 17, total net flows into US-based spot Bitcoin ETFs reached $20 billion, a feat accomplished in just ten months since their launch. For context, it took gold ETFs nearly five years to reach a similar level of investment. Although Bitcoin experienced a surge to an almost three-month high of $69,487 on October 21, it retraced to trade at $68,570 as of 8:25 AM UTC, as per data from Cointelegraph. The stagnation in Bitcoin’s pricing might be attributed to the delayed influence of ETF inflows, which typically take several days before affecting the spot price, as per analysts at Bitfinex. They indicated, “Usually, this means that large ETF inflows have a muted impact for a few days and then the market reverses lower once the aggression from spot market buyers fades. We need sustained spot market interest to push price out of the current range-bound price action.” Despite the positive ETF inflows that could potentially lead Bitcoin to reach unprecedented heights, analysts have cautioned about the subdued price movements following these inflows. Remarkably, just one month post-launch, around 75% of new investments in Bitcoin were attributed to US-based spot ETFs, which previously contributed to Bitcoin surpassing the $50,000 mark. Furthermore, BlackRock’s iShares Bitcoin Trust ETF has been noted for its substantial contributions, with an inflow of over $1.17 billion, as reported by on-chain intelligence outfit Lookonchain. Despite this, Bitfinex analysts remarked that a portion of last week’s inflows could be linked to delta-neutral trading strategies, which may further dilute their immediate price impact. On a more positive note, Bitcoin recently closed the week above the crucial mark of $69,000, which could position it for a rally to revisit a price range exceeding $71,000 for the first time since June 2024, as suggested by crypto analyst Rekt Capital. Anticipation surrounds positive ETF inflows, especially following the recent approval of the first Bitcoin ETF options by the Securities and Exchange Commission on October 18.

The topic at hand revolves around Bitcoin’s price performance relative to significant growth in spot Bitcoin ETFs in the United States. The rise in ETF inflows is a critical development for the cryptocurrency market as it reflects institutional interest and investment. The implications of these inflows on Bitcoin’s price are complex, influenced by both immediate reactions in the market and the longer-term trends of investor behavior following such substantial investments. Understanding the interplay between ETF inflows and Bitcoin pricing is essential for analyzing market dynamics and predicting future movements in the cryptocurrency space.

In summary, Bitcoin’s price has yet to breach the $70,000 mark, even amidst remarkable ETF inflows totaling $20 billion within ten months of launch. Analysts emphasize that ETF inflows often incur a lag in their impact on the spot price. While the recent bullish weekly close above $69,000 presents a potential positive signal, the market will likely require sustained interest to realize upward price movement. The landscape may further evolve following the approval of Bitcoin ETF options by regulators, which could invigorate market activity.

Original Source: cointelegraph.com