It seems like bulls are taking charge in the supposedly risky corners of the financial market.
Bitcoin (BTC), the top cryptocurrency by market value, surged nearly 13.5% to $48,300 over the seven days leading up to February 12th, marking its most significant weekly gain since October. Concurrently,
This uptrend coincided with sustained inflows into U.S.-based spot bitcoin exchange-traded funds (ETFs), which likely overshadowed news of Genesis, a crypto lender, seeking approval to liquidate its $1.6 billion bitcoin holdings. On Thursday alone, spot ETFs garnered over $400 million in inflows, marking their strongest performance in nearly a month.
The digital asset has edged up by around 1% to reach $48,436 as of 9:50 a.m. on Monday in Singapore. If this upward momentum continues, it would mark the seventh consecutive daily gain, the longest such streak since January 2023, according to data compiled by Bloomberg.
Since January 11th, nine new spot Bitcoin funds have entered the US market, collectively drawing in over $9 billion in investor inflows. Notably, offerings from BlackRock Inc. and Fidelity Investments stand out as the most successful ETF launches, as per analysts Eric Balchunas and James Seyffart from Bloomberg Intelligence.
Caroline Bowler, CEO of crypto platform BTC Markets Pty, noted on Bloomberg Television the increasing movement of institutional money into the asset class, indicating a growing interest from larger investors.
The Grayscale Bitcoin Trust, a prominent portfolio dedicated to the token, transitioned into an ETF on the same day the new funds debuted. While there was initially a significant outflow of over $6 billion from the Grayscale vehicle, this trend has slowed down. Collectively, the batch of 10 ETFs has attracted a net inflow of $2.8 billion.
The excitement surrounding the ETFs sparked a Bitcoin revival last year, briefly propelling the token past $49,000 on their trading debut. However, a subsequent multiday selloff of $10,000 followed as investors took profits and waited to assess the performance of the ETFs. The subsequent rebound has brought the $50,000 mark into view, a level last seen in 2021.
Additionally, optimism regarding the quadrennial Bitcoin halving scheduled for April is also influencing sentiment across the crypto market. The halving reduces the amount of Bitcoin miners receive for validating transactions on the blockchain, historically leading to price support.
Apart from ETF inflows, sentiment towards Bitcoin is generally positive during the ongoing Lunar New Year holidays in Asia, as noted by Fundstrat Global Advisors.
Despite these positive developments, Bitcoin still remains approximately $20,000 below its all-time high reached in 2021 during the pandemic-fueled bull market driven by loose monetary policies.
