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 tied to the changing dynamics in ETF inflows and outflows, most notably the Grayscale Bitcoin Trust (GBTC).
On January 29 (Bitcoin ETF Day 12), a notable shift occurred. The Bitcoin spot ETFs witnessed significant net inflows of $255 million, while Grayscale’s GBTC saw significant net outflows of $191 million. The other nine ETFs, led by Fidelity and BlackRock, saw combined net inflows of $446 million, making it the third-highest inflow day for Bitcoin ETFs.
New all-time record for Bitcoin halving?
This scenario of high inflows and reduced outflows from Grayscale’s GBTC presents an intriguing change from previous days, when GBTC outflows dominated and weighed heavily on market sentiment.
Crypto analyst @WhalePanda, who is part of the YouTube channels “Magical Crypto Friends” (along with Samson Mow, Charlie Lee and Riccardo Spagni), commented on this development, saying: “A net inflow of $250 million per day is crazy. That means 5,800 Bitcoin will be taken off the market in just one day.”
He emphasized the importance of this volume, especially when compared to the daily Bitcoin mining rate of 900 BTC. MicroStrategy purchased BTC for $615 million between November 30 and December 26.
While WhalePanda acknowledged that the influx will slow down one day, he expects that to happen later. “The higher price creates more exposure, which leads to more inflows, which in turn pushes the price even higher. This is a classic example of the bull-cycle flywheel mechanism working, even before the halving,” he noted.
The renowned crypto expert further explained that “the amount of Bitcoin float will drop significantly in the coming days and once the price starts moving with limited supply left… Things could get crazy. No, not $1 million crazy. Crazy for me is breaking ATH before halving.”
In a separate one after on X, @WhalePanda expressed his outlook for the week: “This will be a big week for #Bitcoin. Now that GBTC outflows are slowing and there was a strong inflow last Friday, we may be seeing the beginning of a new trend.” He highlighted the potential for this momentum to become a self-fulfilling prophecy, sending Bitcoin’s price soaring.
Spot BTC ETFs remain the focus
Thomas Fahrer, co-founder of Apollo Sats, added context of these huge BTC numbers, noting: “The 9 new ETFs hold more BTC than Tether, Tesla, Block, and all public miners combined. Soon they will surpass MSTR, and later even GBTC.”
Alex Thorn, head of research at Galaxy, commented on the potential implications for BTC’s price trajectory, especially with regard to ETH: “With grayscale outflows appearing to slow and other Bitcoin ETF flows remaining positive, I’m curious to see future towards the ETHBTC cross. A lower trajectory appears to be the path of least resistance in the short term.”
where the outflow appears to decrease in shades of gray and others #bitcoin etf flows seem to be positive now, once again I’m wondering where the ETHBTC cross will go. lower once again feels like 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 outflows from Grayscale, and the expectation of Bitcoin’s upcoming halving create a uniquely bullish 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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