Bitcoin Peaks at $64K, ETFs Attract $7.35B

Quick Look

• Bitcoin’s (BTC) price surged, peaking at $64,279, marking a significant rise for the first time since November 2021.
• U.S. Bitcoin ETFs have attracted $7.35 billion in net inflows since starting trading in January 2021.
• The upcoming Bitcoin halving event could reduce the new BTC supply, potentially pushing prices higher.
• Ether and Solana saw modest gains, while the BTC-spot ETF market noted significant inflows and outflows.
• Economic indicators suggest a possible Fed interest rate cut in June, potentially boosting demand for Bitcoin.

Bitcoin has demonstrated remarkable resilience, with its price ascending for two consecutive days and reaching a high of $64,279. This milestone surpassed the $64,000 mark for the first time since November 2021. The introduction of Bitcoin ETFs in the U.S. has significantly influenced this surge. The cryptocurrency’s value has soared approximately 186% over the last 12 months.

Since its debut on January 11 2024, U.S. Bitcoin ETFs have seen net inflows of $7.35 billion. This influx is a testament to growing investor confidence and interest, potentially setting the stage for Bitcoin to challenge its all-time high of nearly $69,000. The market dynamics gain additional strength from the expectations surrounding the BTC halving event anticipated later this year. This event could actively constrain the new Bitcoin supply, potentially leading to a further increase in its price.

Ether & Solana Up; BTC ETFs See $1.7B Inflows.

Aside from Bitcoin, other major cryptocurrencies like Ether and Solana have also experienced gains, although they are more moderate in comparison. The investment flows within the BTC-spot ETF market have been particularly noteworthy, with the market gaining 1.80% on one occasion, culminating at $63,139. The week ending March 1, 2023, saw net inflows into this market reach $1,722.5 million, with the iShares Bitcoin Trust (IBIT) attracting $2,050.5 million.

Conversely, the Grayscale BTC Fund (GBTC) faced $1,455.7 million in net outflows, highlighting the shifting preferences among investors. Furthermore, the net outflows of $140 million from GBTC on March 1 primarily stemmed from Genesis Global Holdco LLC liquidating approximately $1.3 billion worth of GBTC shares.

Fed Cut Hints; Bitcoin Eyes $69K High

Economic indicators signalling a potential Federal Reserve interest rate cut in June have sparked optimism for increased demand for riskier assets like Bitcoin. The probability of this rate cut stood at 56.8% by the week ending March 1, 2023.

Investors also await Federal Reserve Chair Powell’s testimony, which could further influence market flows and investor sentiment. Technically, Bitcoin has shown strength above critical moving averages, with a break above $64,202 potentially paving the way to retest the all-time high of $69,276. However, the overbought conditions indicated by the 14-Daily RSI at 81.16 suggest that selling pressure could mount, necessitating cautious optimism among traders and investors alike.

In summary, Bitcoin’s recent performance and the burgeoning interest in Bitcoin ETFs underscore a vibrant and evolving cryptocurrency market. The halving event on the horizon and favourable economic indicators set the stage for an intriguing period in the crypto space. Investors and market watchers are advised to stay abreast of these developments as they unfold.