Cryptocurrency proponents may be regaining momentum?
Here's a Fresh Take:
Bitcoin ETFs Smash Records with Six Straight Days of Inflows, accumulating a whopping $3 Billion in a week. This marks the first successful week since March, igniting buzz amidst escalating geopolitical tensions.
The digital asset market is on a roll, with the total crypto market cap nudging close to $3 trillion and a 24-hour trading volume of close to $100 billion. Yet, the Fear and Greed Index indicates investors are skittish, with sentiment hovering around "fear" levels.
Grayscale Loses, BlackRock Leads the Pack
Data reveals that the recent Bitcoin ETF influx recorded in March was the strongest in half a year. On April 25, a mind-boggling $380 million flowed into Bitcoin ETFs. BlackRock's iBTC fund led the charge with a staggering $240.15 million inflow on Friday, boosting its total net inflows to a whopping $41.2 billion. Fidelity's FBTC fund trailed close behind with a daily inflow of $108.04 million, accumulating $11.86 billion in net inflows.
In stark contrast, Grayscale's GBTC product continues to struggle, recording $7.53 million in outflows in the last 24 hours, adding to a total outflow of $22.69 billion.
As Bitcoin's price surges by over 10% in the past seven days, thanks to the robust ETF inflows, the digital currency is currently trading at an average of $94,366. The 24-hour trading volume increased by 16% to $35.7 billion. Eric Balchunas, a senior analyst at Bloomberg, noted:
"ETFs are essentially Bitcoin's proxy."
According to Balchunas, the rapid movement could be due to Wall Street leveraging the spread between futures and spot markets through a "basis trade" strategy.
Institutional Investors Go All-In on Bitcoin
April's volatile market has given investors the jitters. Nine out of the 18 trading days in April concluded in the red. However, Michael Saylor, who addressed the Bitcoin Corporations Investor Day event, predicted that BlackRock's iBTC fund could dominate the ETF landscape in the next decade, currently led by Vanguard's S&P 500 ETF (VOO) with a market cap of $593.5 billion.
The surge in Bitcoin ETF entries, coupled with the rising price, signifies that institutional investors are eager to dive headfirst into the market. The optimistic sentiment towards Bitcoin on social media views ETFs as evidence of Bitcoin's growing acceptance in the corporate world.
Glassnode data suggests that open interest in perpetual swaps has spiked by 281,000 BTC since March, representing a 15.6% increase. This indicates that the market's dependence on leverage is also growing as prices rally. However, despite the surge in open interest, the average funding rate has dropped to -0.023%. This suggests that short (bearish) positions are taking the lead. Analysts caution that this setup could lead to a potential short squeeze scenario.
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- The Bitcoin ETF influx in March was the strongest in half a year, with a massive $380 million flowing into Bitcoin ETFs on April 25, led by BlackRock's iBTC fund with an inflow of $240.15 million.
- Despite the Fear and Greed Index indicating investors are skittish, institutional investors are increasingly interested in Bitcoin, as seen by the surge in Bitcoin ETF entries and the rising price.
- The rapid movement in Bitcoin ETFs could be due to Wall Street leveraging the spread between futures and spot markets through a "basis trade" strategy, according to Eric Balchunas, a senior analyst at Bloomberg.
- The average funding rate has dropped to -0.023%, suggesting that short (bearish) positions are taking the lead, although analysts caution that this setup could lead to a potential short squeeze scenario, as open interest in perpetual swaps has spiked by 281,000 BTC since March, representing a 15.6% increase.
