The recent spike in Bitcoin‘s value has been largely driven by substantial capital pouring into US-based Bitcoin exchange-traded funds (ETFs) since their initiation in mid-January. By early March, the premier digital currency had reached unprecedented heights despite a subsequent market pullback, maintaining an overall increase of more than half its previous value.
Market Bears Caught Off-Guard
A resilient Bitcoin has caught pessimistic investors by surprise, leading to significant losses. Attempts to bet against its ascending price were frustrated through a succession of short squeezes that occurred at the end of February and the start of March, bolstering the cryptocurrency‘s upward trajectory.
On-chain analytical data highlights a notable rise in Coinbase premium rates, signaling a strong purchase interest from US institutional investors potentially fueled by a fear of missing out. Despite occasional fears of a corrective dip, the market’s confidence in Bitcoin’s enduring value seems undeterred.
Institutional Investors Propel ETF Inflows
The launch of nine spot ETFs has seen an overwhelming investor response, attracting over $7.5 billion in Bitcoin inflows. This uptick has occurred alongside withdrawals from Grayscale’s GBTC fund, which is transitioning to a spot ETF following SEC approval.
Moreover, these ETFs saw their highest trading volumes on March 5, with trades nearing $10 billion, thanks in part to BlackRock’s IBIT fund. The substantial interest in these spot ETFs suggests a strong market sentiment and points to continued investor appetite for Bitcoin exposure.