Bitcoin Surges to New High for 2023, Institutional Interest Returns
Crypto News – Bitcoin, the world’s largest digital asset, has made an impressive resurgence, reaching a new high for the year, surging past $35,000 during the Asian trading session. Furthermore, institutional investors are displaying renewed interest, marking the fourth consecutive week of inflows into cryptocurrency products.
Bitcoin (BTC) has attained its highest price point since May 2022, reaching $35,066 during the Tuesday morning Asian trading session.
Institutional Favor Returns to Bitcoin
This surge has been driven by the momentum gained over the weekend, with a remarkable 14.5% increase in the past 24 hours. As of the time of writing, BTC was being traded at $34,727, reflecting a 22% increase from the same time the previous week.
It’s noteworthy that the asset has retraced approximately 50% from its peak price of $69,000 in November 2021.
This significant uptrend has been further fueled by the excitement surrounding spot exchange-traded funds (ETFs) and heightened expectations. Analysts have observed that asset management giant BlackRock has obtained a specific license and is possibly gearing up to initiate the process of “seeding” its spot ETF product with funds, potentially commencing this month. Bloomberg ETF analyst Eric Balchunas explained that “seeding an ETF” refers to the initial funding provided, typically by a bank or broker-dealer, to purchase a few creation units (in this case, Bitcoin) in exchange for ETF shares that can be traded on the open market from day one.
However, it’s important to note that seeding typically doesn’t involve a substantial amount of funds, only enough to kickstart the ETF. As Balchunas emphasized, this shouldn’t be interpreted as “BlackRock buying a massive amount of Bitcoin.”
Nonetheless, institutional investors are reentering the crypto market, with the fourth consecutive week of inflows. Institutional inflows have reached $66 million, with Bitcoin products dominating the scene, accounting for $55 million in inflows, according to CoinShares. The recent surge in inflows is believed to be linked to the anticipation of a spot Bitcoin ETF launch in the United States.
Investor Caution
Total assets under management have rebounded by 15% since hitting their lows in early September, now totaling nearly $33 billion, the highest level since mid-August. Nevertheless, CoinShares has pointed out that the recent inflows remain relatively modest when compared to the initial inflows following BlackRock’s announcement back in June.
In contrast to Bitcoin’s resurgent performance, Ethereum (ETH) products continue to experience bearish sentiment, with weekly outflows amounting to $7.4 million.
Despite these variations, the total market capitalization of spot markets has risen to $1.22 trillion, marking its highest point since early August. Much of this growth is attributed to Bitcoin’s strong performance, which has led the market to higher gains.
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