Daily Byte
Cryptocurrency ETF Investments Surge by $2.7 Billion Within a Week Amidst Persisting Market Uptick
Bitcoin ETFs witnessed a massive influx of $442 million yesterday, marking four consecutive days of positive accumulation. The market has been bullish since last Thursday, but Good Friday and Easter holidays led to closures in various regions.
The total assets under management are now at $108 billion, as per CoinGlass' data, hitting a high since late February, with Bitcoin recovering from the $80,000 mark this week. Currently, Bitcoin trades at $95,160, a level not seen since the last week of February.
This week's ETF inflows peaked at $912.7 million and $917 million on Tuesday and Wednesday respectively, coinciding with President Trump's comments about potential reduction in Chinese tariffs. Bitcoin's price began to rise from the $80,000 range on Monday, when ETF inflows amounted to $381.3 million, the highest since January.
ETFs suffered substantial daily outflows throughout February, March, and April, with a one-day exodus of $1.01 billion on February 25.
Kathleen Brookes, Research Director at XTB, told Decrypt that Bitcoin's current performance is partly due to its correlation with the Nasdaq, which is up by around 5% in the past week. Bitcoin and the Nasdaq's correlation has been strengthening since the beginning of the year, now above 50%, making it expected that BTC ETF flows will mirror the Nasdaq more than half the time.
However, the correlation with growth stocks isn't the sole driver of ETF inflows, according to Brookes. Bitcoin, overall, has outperformed risky assets this month amid ongoing tariff wars. Weakness in the dollar, chatter about a structural shift away from it, and reduced confidence in US financial institutions are also fueling demand for crypto, she added.
Simon Peters, an analyst at eToro, suggested that Bitcoin's correlation with U.S. markets has decreased since President Trump's so-called Liberation Day, and its correlation with gold has increased. He believes that the Bitcoin price will trend higher over the next couple of weeks due to an increase in the money supply and positive sentiment in the crypto market.
Brooks is slightly more cautious in her forecast due to Bitcoin's historical volatility, though she believes that the Nasdaq's performance could help Bitcoin sustain its winning streak. She also noted that Bitcoin may see further upside if it clears the Fibonacci retracement level of $95,400, a crucial level in technical analysis for determining significant price highs and lows.
Editor's note: This story was updated for clarity.
Edited by Stacy Elliott
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Insight Briefs
1. Institutional Investment and Record ETF Inflows
Bitcoin ETFs have observed massive inflows from institutional investors, with nearly $1 billion on a single day and $2.68 billion over a recent week—the highest since December 2021. Top ETFs contributing include ARK 21Shares Bitcoin ETF, Fidelity Wise Origin Bitcoin Fund, and iShares Bitcoin Trust. This institutional demand propelled Bitcoin's recent price rally past $95,000.
2. Improving Market Sentiment and Eased Trade Tensions
Investor optimism has increased due to easing U.S.-China trade tensions. Former President Trump's proposal to reduce Chinese import tariffs has helped boost Bitcoin's price above $93,000. This positive sentiment has resulted in strong ETF inflows since January 2022, demonstrating renewed confidence in crypto assets as a part of diversified portfolios.
3. Government and Strategic Initiatives Supporting Bitcoin
Strategic ventures such as a $3.6 billion Bitcoin acquisition by Cantor Fitzgerald, SoftBank, and others, as well as President Trump's executive orders to establish a U.S. strategic Bitcoin reserve, have boosted market confidence. These moves underscore the growing governmental and institutional acceptance of Bitcoin.
4. Macroeconomic Tailwinds: Weakening U.S. Dollar and Fed Criticism
The U.S. dollar has weakened by about 9% year-to-date, reaching levels not seen since April 2022. This depreciation makes Bitcoin more attractive as a store of value or a hedge against currency risk. Simultaneously, doubts and uncertainties surrounding Federal Reserve policies (including interest rate debates) have increased the appeal of Bitcoin as an alternative investment, similar to gold.
- The cryptocurrency market, particularly Bitcoin, has witnessed unprecedented growth, reaching $95,160, a level not seen since February, thanks to record ETF inflows of nearly $2.68 billion in the past week.
- Kathleen Brookes, Research Director at XTB, attributes this growth, in part, to Bitcoin's correlation with the Nasdaq, which has seen a 5% increase in the past week.
- Bitcoin's correlation with growth stocks isn't the only factor driving ETF inflows, according to Brookes; the cryptocurrency has outperformed risky assets this month amid ongoing tariff wars, dollar weakness, and reduced confidence in US financial institutions.
- In light of these factors, Simon Peters, an analyst at eToro, predicts a further rise in Bitcoin's price due to an increase in the money supply and positive sentiment within the crypto market.
- trailing behind the top ETF contributors like ARK 21Shares Bitcoin ETF, Fidelity Wise Origin Bitcoin Fund, and iShares Bitcoin Trust, Institutions have injected a significant amount of capital into Bitcoin, leading to its price rally.
- The recent positive sentiment in the crypto market can also be attributed to improving market sentiment and eased trade tensions, especially the proposal by former President Trump to reduce Chinese import tariffs.
- Strategic initiatives, such as a $3.6 billion Bitcoin acquisition by Cantor Fitzgerald, SoftBank, and others, combined with President Trump's executive orders to establish a U.S. strategic Bitcoin reserve, have boosted market confidence.
- Following these developments, the characteristics of scarcity, technology, and finance have made Bitcoin an attractive investment option, driving demand for ETFs and token sales (ICOs) in the market while fostering competition among crypto platforms.
