Bitcoin
Bitcoin rises to $71,000 as analysts cite rising spot ETF inflows
Analyst expects renewed market confidence as Bitcoin rises to $71,000
The price of Bitcoin rose to $71,000 on Tuesday amid increased spot purchases and spot purchases of BTC exchange-traded funds (ETFs), leading the cryptocurrency community to debate whether this signals the start of a bull market or its peak.
At the time of writing, the world’s largest cryptocurrency traded for $70,950, with a massive 24-hour trading volume of $52.4 billion. The crypto asset’s market capitalization is currently $1.39 trillion.
24-hour BTC price chart | Source: CoinMarketCap
Matteo Greco, research analyst at Fineqia International, highlighted growing investor interest and inflows into Bitcoin spot ETFs as a key driver of Bitcoin’s recent price surge, suggesting renewed confidence in the market.
Bitcoin closed last week at approximately $66,300, reflecting a 7.8% increase from the previous week’s close of approximately $61,500.
“The week was characterized by low daily volatility, with most of the price increase occurring on Wednesday, while the rest of the week exhibited stable price action,” Greco said in a statement to crypto.news.
Renewed Interest in Bitcoin ETFs
After five weeks of low demand, resulting in around $1 billion in accumulated net outflows, the recent rebound near $60,000 has reignited interest, with Farside Investors reporting around $950 million in inflows last week. a level not seen since March.
According to Greco, GBTC was not the only US spot BTC ETF that attracted investor funds last week. The development follows a possible trend reversal for Grayscale’s converted GBTC fund, which experienced its first weekly net inflows in 19 weeks of trading last week. The analyst said GBTC received $31.6 million in net inflows between May 13 and May 17.
However, last week’s GBTC moves paled in comparison to the approximately $17.6 billion in outflows since January, when the U.S. Securities and Exchange (SEC) approved spot Bitcoin (BTC) ETFs.
With the resurgence of spot Bitcoin ETF flows and the recovery of Bitcoin price, Fineqia International analyst believes Attention will now turn to Ethereum (ETH) ETFs.
Potential Outcomes for Ethereum ETFs in Spot
The SEC is expected to make a decision on VanEck and ARK 21Shares’ filings on May 23 and 24, respectively.
“Market participants expect the SEC to withhold approval of these products, despite having approved BTC ETFs in January,” said Greco, echoing predictions of Bloomberg experts.
On May 21, Ethereum rose 18% following an announcement from Bloomberg senior analyst Eric Balchunas that increased the approval odds for Ethereum exchange-traded funds from 25% to 75%.
Balchunas noted that the U.S. SEC’s accelerated pace in approving the ETF may be due to political pressure, noting that the agency had previously demonstrated minimal involvement with ETF applicants.
“Concerns about the liquidity of ETH’s spot and futures markets, coupled with its previous classification as a security by the SEC, contribute to skepticism about quick approval. If rejected, issuers would need to resubmit filings, potentially leading to approval in Q4 2024 or Q1 2025 at best.”
Matteo Greco, Research Analyst at Fineqia International
In contrast, the Fineqia analyst believes the securities regulator may approve 19b-4 filings while delaying S-1 approvals. S-1s are mandatory registration statements for companies prior to public offering of securities, while Forms 19b-4 are used to propose rule changes with the SEC.
The securities watchdog must approve both companies before spot Ethereum ETFs can be traded on U.S. national exchanges. Greco stated that if the SEC goes this route, it could take the opportunity to scrutinize the Ethereum market and possibly decide whether or not ETH is a security.
The analyst concluded: “This decision could be favorable for issuers” as traditional financial investors appear to remain heavily focused on BTC, potentially reducing market activity around ETH Spot ETFs “if launched next week.”