Bitcoin ETF Approval Revolutionizes Investor Perception, Encourages Crypto Investments
Summary:
The approval of the first spot Bitcoin Exchange-Traded Funds (ETFs) in the U.S. in January has revolutionized investor perception of the cryptocurrency industry, according to Sheraz Ahmed, Managing Partner at Storm Partners. Additionally, it was not the ETFs, but the regulatory approval that garnered investor confidence. After a 20-day streak of net inflows, the Bitcoin ETFs started experiencing outflows on June 10, corresponding with a fall in Bitcoin prices from $70,000 to $64,032 by June 18. ETF inflows played a pivotal role in 2024's Bitcoin price rally, accounting for 75% of new investments when Bitcoin crossed $50,000.
The go-ahead for the United States' first spot Bitcoin exchange-traded funds (ETFs) has conferred legitimacy on the cryptocurrency realm for investors. The green light for the inaugural spot Bitcoin ETFs in January has led to the creation of the first regulated, public Bitcoin-centered investment instruments. Sheraz Ahmed, the managing partner at Storm Partners, believes that the Bitcoin ETFs, not due to their direct impact but due to their symbolic significance, have drastically altered investors' perception, particularly over the last few months. The accumulative onchain holdings of the U.S. spot Bitcoin ETFs have hit over $57.7 billion in Bitcoin (BTC), as indicated by the data from Dune.
However, it's not the ETFs' existence, but the endorsement by regulatory bodies has provided interminable relief to cryptocurrency investors. Ahmed highlighted that this reassurance is akin to an eight-hour sleep for any entrepreneur in the volatile crypto industry, as they now know that the industry is here to stay.
June 10 marked the halt for the 20-day streak of net positive inflows into the U.S. Bitcoin ETFs. Since then, they have observed four continuous days of net outflows, with cumulative net outflows over $152.4 million on June 18, based on Farside Investors' data.
A decline in the price of Bitcoin was noticed on June 7 from above the $70,000 bench-mark, which corresponded with the outflows from the ETFs. This led to a correction down to its support at $64,032 on June 18, marking the lowest in over a month, as per Bitstamp data.
Notably, the price rally for Bitcoin in 2024 witnessed significant contributions from ETF inflows. By February 15, about 75% of the new investments in Bitcoin, the world's leading cryptocurrency that breached the $50,000 mark, were accounted for by Bitcoin ETFs.
Published At
6/20/2024 12:54:50 PM
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