Bitcoin (BTC) price continues its uptrend today, closing in on the $53,000 level after an intra-day high at $52,820. Over the week Bitcoin has gained 14.5% over the last week and 22% in 2024. Consistent spot BTC ETF inflows, the upcoming halving event and derivatives data are major factors behind the recent rally in BTC.
BTC/USD daily chart. Source: TradingView
Let’s take a look at the main factors behind Bitcoin’s upside.
Bitcoin futures open interest reaches 26-month high
Data from Coinglass shows the open interest in the futures market standing at $23.85 billion, which is close to the $24 billion record high reached in mid-November 2021 when Bitcoin hit all-time highs above $69,000.
Bitcoin Futures Open Interest (USD). Source: Coinglass
Bitcoin open interest has increased by 102% since mid-October and today. The uptick in open interest has moved in tandem with Bitcoin’s 93% gain over the same period.
The rapid open interest surge also matches Bitcoin’s sharp jump from $45,000 to $69,000 in 2021.
The increase in open interest points to a renewed investor interest in Bitcoin and reflects the steady inflow of new money into the BTC market, mainly due to positive inflows into the new spot Bitcoin exchange-traded funds (ETFs).
Spot Bitcoin ETFs reach $3 billion net inflows
Another factor fueling Bitcoin’s uptrend is the steady flow of capital into spot Bitcoin ETFs.
Spot BTC ETFs have now seen more than $3 billion in net flows, surpassing the Gold ETFs’ performance after they were launched over 20 years ago. According to Bloomberg Intelligence analyst Eric Balchunas, it “took $GLD nearly 2 years” to hit the same milestone.
$IBIT now 4th in overall YTD flows (out of 3,400 ETFs) rubbing elbows w/ the biggest and best $VOO, $IVV and $QQQ. $FBTC also in there at 7th. Even if you account for a little GBTC inflow help (which was but a fraction of their intake) its wild sht. pic.twitter.com/Alk9TfYbHY
— Eric Balchunas (@EricBalchunas) February 13, 2024
Note that approximately half of these inflows have come in the past six days alone, at an average rate of about $450 million per day. Wednesday, Feb. 14 saw Grayscale’s Bitcoin ETF IBIT break its own weekly volume record with $760 million in weekly inflows.
Reason this is interesting and unusual is bc early on IBIT’s volume was correllated w GBTC outflows and perhaps to any ‘lined up’ cash BLK had. Thought all that would wind down a bit in unison, and it started too, but then IBIT broke the f loose.
— Eric Balchunas (@EricBalchunas) February 14, 2024
Data from Farside Investors shows that the nine new spot Bitcoin ETFs have amassed a total of 10,795 BTC, worth approximately $1.09 billion (at current rates). BlackRock’s IBIT led the pack with a total of 4,843 Bitcoin, worth $251 million.
Spot Bitcoin ETF flows. Source: farside.co.uk
In comments to Cointelegraph, CEO of LinkPool Jonny Huxtable said “The inflows and broader interest we’ve seen with spot BTC ETFs signals a pivotal moment in global markets, especially with the Bitcoin Halving just 58 days away.”
Huxtable added,
“This heightened interest reflected in the 11 BTC ETFs underscores the growing institutional and enterprise adoption of blockchain technology within global financial markets.”
Related: Bitcoin ETFs account for about 75% of new investments — CryptoQuant
The approaching Bitcoin halving, which is expected to cut the rewards given to miners in half, will also play a key role in further boosting investors’ interest in BTC. The halving event has, historically, preceded Bitcoin hitting new record highs in the months after the event.
Bitcoin outperforms stocks
Bitcoin rebounded from the 2.8% dip on Feb. 13 in the face of a hotter-than-expected CPI report, which showed annual inflation currently sitting at 3.1%, higher than the 2.9% predicted by economists. The S&P 500 plunged by 1% while the Nasdaq 100 dropped by 2.4%.
After markets digested the CPI print in the U.S., Bitcoin and stocks started rising. BTC was up more than 5% on Feb. 13 while the S&P 500 and Nasdaq 100 rose 0.32% and 1.4% respectively.
Data from Google Finance showed that while Bitcoin has risen more than 9% on the week, the S&P has only risen 0.14%.
Bitcoin vs. stocks performance. Source: Google Finance
“It’s nice to see BTC bounce back so resiliently after the January sell-off that followed the BTC ETF approvals,” Tim Shan, COO at Dexalot said in an email to Cointelegraph.
Shan further noted that “if BTC outperforms tech stocks this year,” there would be an increase in ”widespread interest” in cryptocurrencies.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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