As a seasoned analyst with over two decades of experience in financial markets, I have witnessed numerous market shifts and trends that defied conventional wisdom. The recent surge in Bitcoin exchange-traded funds (ETFs) and the cryptocurrency’s price increase is one such phenomenon that has piqued my interest.
This year, Bitcoin exchange-traded funds (ETFs) that were approved by the U.S. Securities and Exchange Commission have amassed a total of over $23 billion in investments. These ETFs saw their third highest single-day inflow following Bitcoin’s price reaching $72,000.
As per a recent Bloomberg report, these investment funds such as BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity’s Wise Origin Bitcoin Fund (FBTC) experienced an influx of approximately $870 million following the rise in the value of cryptocurrency.
At this moment, Bitcoin is being traded at approximately $72,400. Over the past week, its value has increased by over 9%, resulting in a staggering market capitalization of around $1.43 trillion. This remarkable rise has led to IBIT, the top-tier Bitcoin spot ETF, handling transactions worth about $3.3 billion in just one day.
Eric Balchunas, senior ETF analyst at Bloomberg, found it unusual that the trading volume occurred during a period when Bitcoin’s price was relatively stable, as volumes for ETFs usually increase during market downturns. However, he noted that volume can also surge if there’s a sense of fear among investors about missing out on potential gains (FOMO).
Today, IBIT traded approximately $3.3 billion, marking the highest volume in the past six months, which is somewhat unusual since Bitcoin increased by 4%. This is typically when ETF volumes increase during market downturns or crises. However, it’s also possible that this surge in trading could be due to a ‘fear of missing out’ (FOMO) frenzy similar to what was seen with $ARKK in 2020. Given the recent upward trend in prices, my guess is that this increase in volume might be…
— Eric Balchunas (@EricBalchunas) October 29, 2024
Some experts link Bitcoin’s recent price increases to the strong showing of U.S. Presidential candidate Donald Trump in the election betting markets. Throughout this electoral season, Trump has expressed a favorable view towards cryptocurrencies, even going so far as to remark that there’s simply nothing comparable to Bitcoin.
At a Bitcoin gathering recently, Trump expressed his belief that Bitcoin could potentially outshine the market value of gold someday. Moreover, he indicated his aim is for all Bitcoin mining operations to take place within the U.S., positioning America as the dominant force in Bitcoin worldwide.
Contrary to what the election market suggests, polls indicate a close contest between Donald Trump and Vice President Kamala Harris. Interestingly, Harris has also expressed her intention to establish a regulatory framework for the cryptocurrency sector.
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2024-10-30 16:45