Bitcoin ETFs recently crossed the $20 billion threshold in capital in the United States and this momentum shows no signs of slowing. From one continent to another, investors are flocking to these financial instruments, attracted by the promise of quick gains. Europe is not left out, with more than $105 billion invested in Bitcoin ETFs in 2024, a record. But then, why is the price of BTC struggling to cross the symbolic $70,000 mark?
Bitcoin ETFs: Record attendance but reduced impact
European investors poured in over $105 billion in Bitcoin ETFs in the United States this year, shattering all previous records. This wave of investments is not only European; Asian flows are also clearly increasing.
Despite this enthusiasm, the price of Bitcoin has remained stuck below $70,000 since July.
A Bloomberg analyst, Eric Balchunasnoted that these massive inflows do not immediately produce the expected effect on the marketdue to the use of ETFs as “exit liquidity” by some traders.
- About 75% of new capital inflows contributed to surpassing $50,000 in February 2024;
- Bitcoin ETFs now hold over $66.3 billion in BTC on the blockchain;
- The Bitcoin network's computing power, or hashrate, reached an all-time high on October 21.
Stagnation of the price of BTC despite records
Bitcoin price, although strengthened by ETF flows, failed to break the glass ceiling of 69,500 dollarsa final signal of the imminent explosion. This situation persists despite six consecutive days of positive net flows in ETFs, with a peak purchase of $555 million on October 14which only caused a temporary increase of 5%.
According to analysts at Bitfinex, the delay in the impact of ETF flows is explained by order of market transactions. Initial strong demand is often followed by a correction when momentum runs out.
Thus, market participants should remain cautious as the rise of Bitcoin ETFs could soon dictate market flows. Heavyweights like BlackRock and Grayscale have certainly not said their last word.
Maximize your Tremplin.io experience with our 'Read to Earn' program! For every article you read, earn points and access exclusive rewards. Sign up now and start earning benefits.
