The bitcoin market is currently experiencing an inflection point, largely driven by recent trends in bitcoin exchange-traded funds (ETFs). Yesterday, the price of bitcoin rose above $43,000, a move closely related to the changing dynamics in ETF inflows and outflows, particularly involving the Grayscale bitcoin Trust (GBTC).
On January 29 (bitcoin ETF day 12), a notable change occurred. bitcoin spot ETFs witnessed a significant net inflow of $255 million, while Grayscale's GBTC saw a significant net outflow of $191 million. The other nine ETFs, led by Fidelity and BlackRock, recorded a combined net inflow of $446 million, making it the third-highest inflow day for bitcoin ETFs.
New All-Time High Until bitcoin Halving?
This scenario of high inflows and low outflows from Grayscale's GBTC presents an intriguing change from the previous days, where GBTC outflows dominated and weighed heavily on market sentiment.
crypto analyst @WhalePanda, who is part of the “Magical crypto Friends” YouTube channels (along with Samson Mow, Charlie Lee and Riccardo Spagni), commented on this development and stated: “Net inflow of $250 million in one day It's crazy. That means 5,800 bitcoin will be removed from the market in just one day.”
He highlighted the importance of this volume, especially compared to bitcoin's daily mining rate of 900 btc. MicroStrategy purchased $615 million worth of btc between November 30 and December 26.
While WhalePanda acknowledged that entries will slow down one day, it expects this to happen later. “The rising price is driving more exposure, which drives more entries, which in turn drives the price up even further. “This is a classic example of bull cycle flywheel mechanics at play, even before the halving,” he commented.
The renowned crypto expert further explained that “bitcoin's float amount will decrease significantly in the coming days and once the price starts moving with limited supply… things can get crazy. No, not a million dollar crazy thing. Crazy for me is breaking the ATH before halving it.”
in a separate mail On X, @WhalePanda expressed his outlook for the week: “This is going to be a big week for #bitcoin. With GBTC outflows declining and a strong entry day last Friday, we could be seeing the beginning of a new trend.” He emphasized the potential for this momentum to become a self-fulfilling prophecy, driving up the price of bitcoin.
btc spot ETFs remain the focus
Thomas Driver, co-founder of Apollo Sats, aggregate context of these huge btc spot figures, noting: “The 9 new ETFs hold more btc than Tether, Tesla, Block and all public miners combined. “They will soon surpass MSTR and later even GBTC.”
Alex Thorn, Head of Research at Galaxy, commented on the potential implications for btc's price trajectory, especially relative to eth: “As Grayscale outflows appear to decline and other bitcoin ETF flows remain positive “I'm curious about the future direction of the ETHBTC cross. A lower trajectory seems like the path of least resistance in the short term.”
with grayscale outputs that appear to diminish and others bitcoin?src=hash&ref_src=twsrc%5Etfw” rel=”nofollow”>#bitcoin ETF flows now look positive, again wondering where the ETHBTC cross is headed. Down again seems the path of least resistance in the short term. pic.twitter.com/DVPi1pdWP0
– Alex Thorn (@intangiblecoins) January 30, 2024
This confluence of ETF inflows, declining Grayscale outflows, and anticipation of the upcoming bitcoin halving are creating a unique bull market environment. However, at the time of writing, btc is trading below a key resistance at $43,444.
Featured image created with DALL·E, chart from TradingView.com
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