Bitcoin Hits Two-Year High Amid Steady ETF Inflows and MicroStrategy's Latest Acquisition
Summary:
On February 23, Bitcoin's value broke records, reaching a new two-year high of $54,360. This increase is significantly influenced by ETF inflows, the impending supply halving, and overall positive investor sentiment. MicroStrategy announced another Bitcoin acquisition, taking their total holdings to 193,000 BTC. Interest in the Bitcoin futures market also rose, resulting in liquidation of Bitcoin short positions worth $41.85 million on February 26.
On February 23, Bitcoin's (BTC) value surged out of its previous bracket, attaining a fresh two-year peak of $54,360, thus maintaining its upward trend for 2024. This shift in Bitcoin's price trajectory is primarily driven by a steady flow of Bitcoin ETFs, the ensuing supply reduction and a generally optimistic sentiment among both retail and institutional investors. Let's delve deeper into the forces propelling Bitcoin's current upswing.
CoinShares reports that 99% of all capital inflows in the past week were directed towards BTC investment products. The total inflows reached a significant $569.5 million, pushing the global assets managed to an impressive $67.5 billion.
Furthermore, Bitcoin ETFs have been attracting capital inflows since their launch on January 11, with a total of $5.5 billion recorded so far, based on data from Yahoo Finance. CoinShares states that this has led to a net inflow of $5.8 billion for crypto products from their trading initiation.
The upward price trajectory of Bitcoin has mirrored the performance of Bitcoin ETF, with BlackRock's Bitcoin ETF IBIT witnessing a 5% surge on February 26, mere hours after Wall Street commenced trading, and reaching new height records.
Institutional investors continue to accumulate Bitcoin steadily, with MicroStrategy, the leading corporate Bitcoin owner, announcing further Bitcoin purchases. Michael Saylor, the founder and chairman of MicroStrategy, revealed on February 26 via social media that the firm bought an extra 3,000 BTC between February 15 and 25 for $155 million, resulting in an average cost of $51,813 per BTC. The firm now owns 193,000 BTC, purchased for approximately $6.09 billion at an average price of $31,544 per BTC.
According to data from Farside Investors, the ten Bitcoin ETFs in the US that launched on January 11 now hold a total of 5,500 BTC. This steady accumulation by institutional investors is likely to filter down to retail traders, who might purchase more Bitcoin in anticipation of a future price surge.
Data from Coinglass reveals a growing interest in the Bitcoin futures market, displaying a 102% rise from mid-October to the present value of $23.43 billion. This figure is nearing the record of $24 billion, achieved in November 2021 when Bitcoin scaled new heights of above $69,000.
Coinglass data also shows that the February 26 price surge resulted in the liquidation of Bitcoin short positions worth $41.85 million, alongside long liquidations of roughly $9.7 million. Astonishingly, Bitcoin shorts worth almost $39 million were liquidated in the past four hours alone.
Investors are hopeful that this bullish price action will continue as the supply halving event approaches and more capital keeps flowing into Bitcoin ETFs. However, potential investors should thoroughly investigate and consider the associated risks before making any investment or trading decisions.
Published At
2/26/2024 11:06:02 PM
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