A Rapid Climb in Total Net Flows
A Perfect Storm for Crypto Investments
Asia's Influence on the Market
Bitcoin spot exchange-traded funds ETFs recorded a remarkable $2.67 in net inflows in just one week, with $294 alone on October 21, according to SoSovalue data. The standout performer among these ETFs is BlackRock's iShares Trust, which has been attracting substantial investments. On October 21, investors funneled $329 million into IBIT. This marked the third time in four trading days IBIT secured inflows exceeding $300 million, according to Farside data. BlackRock's IBIT now boasts over $23 billion in total inflows, solidifying its position as the dominant player in Bitcoin ETF market. Notably, IBIT ranks third for ETF inflows in 2024, only behind Vanguard and BlackRock's S&P 500 index funds, and IVV.
A Rapid Climb in Total Net Flows
As of October 21, U.S.-based spot Bitcoin ETFs surpassed $21.23 billion in total net flows, an achievement considering they have been on the market for less than a year. In comparison, it took gold ETFs nearly five years to reach this milestone.
On October 21, Bitcoin reached a near three-month high of $69,487 before retracting to approximately $68,570. This price action may be influenced by a lag effect from the influx of ETF investments, which can take time to reflect in the spot price, as highlighted by Bitfinex analysts.
A Perfect Storm for Crypto Investments
The recent surge in Bitcoin ETF inflows can be attributed to a combination of factors, described by some experts as a "perfect storm" for cryptocurrency investments.
According to CoinTelegraph, Chris Aruliah, head of institutions at Bybit, noted that the upcoming U.S. elections are instilling confidence in investors.
With both sides of the political spectrum making favorable comments about cryptocurrencies, there is a growing expectation of regulatory clarity.
Moreover, Alicia Kao, managing director at KuCoin, pointed out that macroeconomic optimism is fueling this trend. Recent economic data has alleviated concerns about a recession, with the Federal Reserve starting to lower interest rates.
This environment encourages hedge fund participation in digital assets, with 47% of traditional hedge funds now investing in cryptocurrencies, up from 29% in 2023. Kao emphasized that many of these funds plan to either maintain or increase their digital asset exposure in the near future.
Asia's Influence on the Market
Meanwhile, Asia's MicroStrategy Metaplanet recently raised 10 billion Japanese Yen through stock sales in anticipation of another significant Bitcoin purchase.
On Oct. 15, Metaplanet announced the purchase of nearly 107 Bitcoins, resulting in a 15.7% increase in its share price for the day. With this latest acquisition, Metaplanet now holds 855.5 BTC, valued at $57.8 million at current market rates.