Key Points
Bitcoin (BTC) has experienced a bullish surge, reaching a new year-to-date high of $52,900 this week.
This surge is fueled by strong inflows into spot exchange-traded funds (ETFs).
Analysts attribute this positive momentum to several key factors.
These include rising investor demand for these ETFs, their positive impact on BTC price, and an overall shift in market sentiment.
Spot Bitcoin ETFs and Price Recovery
Spot Bitcoin ETFs, which track the price of the crypto directly, have seen significant inflows in recent weeks.
According to a report by Bitfinex Alpha, these ETFs recorded net inflows exceeding $2.2 billion for the second consecutive week between February 12th and 16th.
This is the highest weekly inflow ever recorded for Bitcoin ETFs, surpassing any other exchange-traded product among the 3,400 currently trading in the United States.
Analysts believe these inflows are playing a crucial role in the digital asset’s recent price recovery.
After a brief dip following the Consumer Price Index (CPI) data release, BTC has climbed steadily, reaching its highest point since December 2021.
This uptrend coincides with the surge in ETF inflows, suggesting a potential link between the two.
Among the various Spot Bitcoin ETFs, BlackRock’s iShares Bitcoin ETF (IBIT) has emerged as the frontrunner.
It attracted a staggering $1.6 billion in inflows last week.
This brings IBIT’s year-to-date inflows to a remarkable $5.2 billion, representing nearly half of BlackRock’s total net inflows across all their ETFs.
Other notable performers include Fidelity’s Wise Origin Bitcoin Trust (FBTC) with $648.5 million, Ark Invest/21Shares’ ARKB with $405 million, and Bitwise BTC Fund (BITB) with $232.1 million in inflows.
However, Grayscale’s Bitcoin Investment Trust (GBTC) continues to experience outflows.
Investors withdrew $624 million last week.
This trend has persisted since the U.S. Securities and Exchange Commission (SEC) approved GBTC’s conversion from an over-the-counter product to an ETP in January, resulting in over $7 billion in capital depletion.
As the king coin’s price rises, the portion of its supply held at a profit is also increasing.
Currently, only 11% of the total BTC supply, purchased above $50,000, is held at a loss.
This indicates that a majority of Bitcoin holders are now in profit, potentially contributing to a more bullish market sentiment.
Further highlighting the growing interest in Spot Bitcoin ETFs, trading volume reached nearly $2 billion last week.
This marks the highest total since the first day of trading on Jan. 11th, indicating significant activity within this market segment.
