Amidst Bitcoin‘s soaring value surpassing the $50,000 milestone, a substantial portion of new investments into the cryptocurrency is attributed to the emergence of Exchange-Traded Funds (ETFs).
According to a recent report by on-chain data analytics firm CryptoQuant, approximately 75% of fresh capital inflows into Bitcoin can be traced back to the ten newly approved spot Bitcoin ETFs in the United States.
Rapid influx of investments from Spot Bitcoin ETFs
Over the past fortnight, the majority of new investments into Bitcoin, excluding Grayscale’s Bitcoin Trust (GBTC) ETF, have originated from spot Bitcoin ETFs. This surge in investment, totaling over three-quarters of the influx, signifies a significant shift in market dynamics.
These ETFs have amassed approximately 4,115 Bitcoins, equivalent to a staggering $215 million, as reported by data from Farside Investors.
Among the spot Bitcoin ETFs, BlackRock’s iShares Bitcoin Trust ETF has emerged as a frontrunner, attracting the lion’s share of inflows. With a total acquisition of 4,843 Bitcoins, valued at approximately $253 million at the time, this ETF has demonstrated substantial investor confidence in Bitcoin’s potential as a lucrative investment avenue.
Bitcoin’s price surges as ETF demand skyrockets
The surge in Bitcoin’s price, reaching a notable high of $51,000 on February 14th, has largely been attributed to the escalating demand from ETFs. Julio Moreno, the head of research at CryptoQuant, emphasized that Bitcoin’s crossing of the $50,000 mark can be primarily attributed to the fresh demand stemming from these investment vehicles.
Anticipated price targets and market dynamics
Despite facing significant resistance around the $52,000 mark, Bitcoin is expected to breach the $56,000 threshold in the near term, according to the CryptoQuant research report. Valuation indicators suggest a bullish outlook, with minimal risks of a substantial price correction.
However, market analysts caution that Bitcoin may encounter hurdles in surpassing the $52,000 mark, owing to a notable influx of sell orders on Bitfinex up to the $52,300 level.
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