Investors reacted positively to Federal Reserve’s encouraging remarks this week, which helped spot Bitcoin ETFs continue their good performance.
The funds added assets of over $186m in four days. Over $500 million worth of assets have been added in the last four days. This brings the total amount to $17.4 Billion.
The majority of these ETFs are adding assets. The iShares Bitcoin Trust, Fidelity Bitcoin Trust, Ark Bitcoin Trust, Bitwise Bitcoin Fund, and Fidelity Bitcoin Trust all have over $20 billion in assets.
The Grayscale Bitcoin Trust, which is a very expensive investment, with an expense ratio (GBTC) of 1.50 %, had accumulated outflows in excess of $20 billion.
Federal Reserve interest rate cut
This week, the Federal Reserve’s decision on Wednesday was the main driver for the ETFs. The Fed cut rates by 0.5% as expected and hinted at further cuts.
Fed made the case for the cut by pointing out that there was an improvement in the job market and inflation would soon reach the target of 2%.
The US Consumer Price Index data released last week showed that headline CPI dropped from 2.9% to 2.5% while the core CPI was still at 3.2%.
Consumer prices are continuing to fall. First, crude oil prices have fallen, and the West Texas Intermediate has dropped below $70 per barrel. Triple A data shows the average price of gasoline has dropped to $3.15 from $3.88 one year ago.
China is still experiencing deflation, which is notable since the country exports the most to the United States.
If inflation falls, spot Bitcoin ETFs such as IBIT, FBTC ARKB and BITB are likely to attract greater inflows.
Bitcoin is a catalyst for more than just cryptocurrencies
Another reason that the Bitcoin price will do well in 2017 is because it has more positive catalysts.
The first thing to note is that there are indications of large Bitcoin owners not selling and some even continuing to purchase. MicroStrategy is a good example, as it spent $1 billion more to purchase Bitcoin in the last month. The company is raising more money to keep up the purchase.
Bhutan, with its GDP at $3 billion, and population less than 1,000,000, is a tiny country that has invested over $800 millions in Bitcoin. As more countries diversify their investments, it is likely that Bitcoin will be adopted by them in the future.
Blackrock argued for Bitcoin in a recent white paper , noting the fact that it outperforms gold and stocks in geopolitical terms. The paper also stated that Bitcoin is a very uncorrelated asset.
BlackRock has just released a 9-page paper that argues for Bitcoin ETFs as “unique diversifiers” which can help hedge fiscal, monetary, and geopolitical risk. Also includes section “Bitcoin’s Path to $1 Trillion Market Cap” Read the whole thing here :…
The falling reserves could also be a positive for Bitcoin ETFs. CoinGlass data shows that Bitcoin exchange balances fell to 2,35 million from 2.5 million in the first half of this year.
The fact that reserves are falling is good news, as it indicates many investors have transferred their coins into external wallets such as MetaMask. Bitcoin is more volatile in most cases when the supply of exchanges increases, like we recently saw with Germany and Mt. Gox was selling its coins.
Bitcoin is likely to benefit, regardless of whether Trump wins or Harris does. Polymarket data indicates that Harris’ lead has increased to 52% compared with Trump’s 47%.
Although Trump and Harris are viewed more favorably in the crypto-community, Bitcoin does not care who occupies the White House. The coin’s performance has been good regardless of president.
Bitcoin reached a new record of $73,800 in the first half of this year, during Gary Gensler and Joe Biden’s terms. The price of bitcoin also reached a new record of $34,000 in the final days of Trump’s administration.
Bitcoin nullifies the Death Cross
Technical reasons may be behind the success of Spot Bitcoin ETFs. On the daily chart there is evidence that Bitcoin avoided forming a Death Cross pattern, when the Exponential Moving Averages of 200 and 50 days cross with each other facing down.
Bitcoin is tilting upwards, and if gains continue it may even form a gold cross. Last time, it led to gains of double-digits. Bitcoin also reached a new record of $69,000 when the Fed last cut interest rates in 2020.
Bitcoin is also forming what’s known as a “bullish flag” chart pattern. This type of chart pattern has a channel that descends after a large bullish movement. If this occurs, Bitcoin is likely to continue its upward trend as bulls aim for the top of the channel, which sits at $67,500.
The post IBIT, FBTC ARKB, BITB : Time to Buy or Sell Bitcoin ETFs appeared first on The ICD. The ICD first published this post IBIT, FBTC, ARKB and BITB: Time to buy or sell Bitcoin ETFs?
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