Bitcoin’s Surge Nears Two-Month High Amid ETF Inflows and Short Liquidations

Bitcoin’s recent rally towards its two-month high of $69,000 has been driven by substantial inflows into spot exchange-traded funds (ETFs) and a notable increase in short liquidations.

At the time of writing, Bitcoin (BTC) is trading at approximately $67,739, marking a 0.6% rise in the past 24 hours. The cryptocurrency’s market capitalization stands at around $1.33 trillion, bolstered by a daily trading volume close to $30 billion.

Short Liquidations Surge, Fueling Price Rally

Data from Coinglass indicates that short liquidations have been pivotal in Bitcoin’s recent upward trajectory. Over the past 24 hours, Bitcoin short liquidations reached $17.91 million, surpassing $11.8 million in long liquidations. This dynamic highlights how the forced covering of short positions can increase demand, driving Bitcoin’s price upward and creating further buying pressure.

Significant Inflows into U.S.-Based Spot Bitcoin ETFs

In addition to market-driven liquidations, inflows into U.S.-based spot Bitcoin ETFs have reached significant levels. Over the past week, these ETFs reported five consecutive days of net inflows, totaling more than $2.12 billion. This trend continued into the start of this week, with $294.29 million in fresh inflows.

On October 24, data from SoSoValue showed that spot Bitcoin ETFs amassed net inflows of $188.11 million, led by BlackRock’s IBIT ETF, which recorded an inflow of $165.54 million. This marks the ninth consecutive day of inflows into BlackRock’s ETF, with the fund amassing nearly $2 billion during this period alone.

Meanwhile, Bitwise’s BITB ETF contributed $29.63 million in inflows, despite experiencing an outflow of $25.2 million the previous day. Conversely, Grayscale’s GBTC ETF saw $7.05 million in outflows, continuing a trend that has seen over $20 billion leave the fund since its inception.

Since the launch of the initial spot Bitcoin ETFs in January, the 12 currently available products have accumulated $21.53 billion in net inflows—a milestone that Bloomberg ETF analyst Eric Balchunas described as “the most difficult metric” to achieve in the ETF landscape.

Balchunas emphasized the rarity of this accomplishment, noting that gold ETFs required five years to reach the same figure, highlighting the rapidly growing appetite for Bitcoin investment among institutions.

Political Tailwinds and Potential Policy Shifts

Beyond immediate market activity, the political landscape in the United States is also influencing investor sentiment.

Speculation surrounding a potential win for Donald Trump in the upcoming presidential election has spurred optimism among Bitcoin investors, who see a pro-crypto administration as likely to enhance blockchain innovation and reduce regulatory obstacles.

The former president’s policy stance, which includes advocating for a blockchain-friendly regulatory environment and potentially replacing SEC Chair Gary Gensler, aligns with many institutional investors’ interests in reduced regulatory oversight.

This potential shift has provided an additional boost to Bitcoin’s price momentum, as it could pave the way for an accommodating regulatory environment conducive to cryptocurrency growth.

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