Bitcoin’s ETF Surge: Are Prices Ready for a Breakout to $100k?

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While Bitcoin’s price has faced challenges amid fluctuating ETF flows, the underlying institutional interest remains strong.  Major institutions like BlackRock and Fidelity are entering the ETF market, which could further influence Bitcoin’s price trajectory. Eric Balchunus, Senior ETF Analyst at Bloomberg Intelligence, joined David Lin for a discussion about ETFs and BTC.  Eric pointed out that the lack of correlation between Bitcoin’s price and ETF flows could be attributed to several factors:

Market Dumps: He explained incidents like the Mt. Gox settlement, where significant amounts of Bitcoin were sold off, contributing to downward pressure on prices. Germany’s sell-off also played a role in affecting market dynamics.

Profit-Taking by Early Investors: Many long-term holders of Bitcoin tend to sell their holdings as prices approach key thresholds, particularly around $60,000 to $65,000. This profit-taking behavior has been particularly pronounced when prices hit the $69,000 to $70,000 range, which has hindered the price from breaking into new highs.

Changing Investor Profiles: Eric said that many early Bitcoin investors are now older and may have additional financial responsibilities. This shift in investor psychology might lead them to prioritize profit-taking over holding.

ETF Flows: A Mixed Picture

Despite the recent price challenges, Eric said that Bitcoin ETFs have shown a net inflow of $18.8 billion year-to-date. This figure is important, especially considering it accounts for the GBTC unlock and any outflows during downturns. He argued that this net positive flow reflects strong institutional interest and can be attributed to the excitement around Bitcoin ETFs.

ETF Impact on Price: Eric argued that the hype surrounding Bitcoin ETFs has played a critical role in pushing prices from $30,000 to $45,000, and subsequently from $45,000 to around $60,000. He suggested that without the support of ETF approvals, Bitcoin could be trading much lower.