Bitcoin ETFs Break Records with 14,261 BTC Purchase

On March 12, Bitcoin exchange-traded funds (ETFs) experienced a surge in trading, with a record-breaking purchase of 14,261 bitcoins. This figure surpasses the initial enthusiasm witnessed during the ETFs’ launch and sets a new high for market engagement. The ETFs’ significant role in the market is highlighted by the method for calculating Bitcoin purchases, which involves dividing the daily monetary inflow by Bitcoin’s average price.

Despite a downturn in inflows that coincided with a reduction in Bitcoin’s price, the ETFs have shown a strong rebound, indicating not just a recovery but an ongoing increase in investments. This surge in demand for Bitcoin through ETFs is contributing to an upward movement in Bitcoin prices, contrasted with the daily new supply from mining at approximately 900 bitcoins. This gap is expected to expand with the upcoming Bitcoin halving event, which will reduce the daily mining output to 450 bitcoins.

A former managing director of wealth management, Clive Thompson, has noted a potential link between the increase in Bitcoin holdings by ETFs and the rise in the cryptocurrency’s price. This suggests that ETF activities could play a crucial role in Bitcoin’s market movements. Despite price fluctuations, Bitcoin’s overall trend remains positive, supported by a high Cryptocurrency Fear and Greed Index at 91, indicating a strong market sentiment.

The market is currently driven by two main factors: the anticipation of the Bitcoin halving event, which is predicted to initiate the next bull cycle, and the continuous interest in ETFs. The introduction of Bitcoin ETFs has been particularly significant, attracting institutional investment and increasing the cryptocurrency’s mainstream appeal.

According to Kaiko Research, liquidity depth in the Bitcoin market has hit a new high, with a notable imbalance between bids and asks in order books, suggesting a trend of profit-taking among traders. Despite this, high refinancing rates indicate sustained demand for Bitcoin.

The rising interest in spot Bitcoin ETFs, both from institutional and retail investors, is making a noticeable impact. With Bitcoin ETFs nearing $60 billion in assets under management (AUM) and rapidly closing the gap with Gold ETFs, which stand at about $98 billion, the momentum suggests a potential shift in investment preferences.

All 10 Bitcoin ETFs are likely to surpass Gold ETFs in AUM, according to Eric Balchunas from Bloomberg Intelligence. The least ranked among them, WisdomTree’s BTCW, already manages $74 million, placing it in the top 15% of the 108 ETFs launched in 2024, signaling a strong market acceptance and growth potential for Bitcoin ETFs.

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