- Yesterday, BlackRock, the operator of the largest Bitcoin ETF, IBIT, made a significant $167 million purchase of Bitcoin as consumer demand for its ETF rose.
- In the last 7 days, the ETF has bought nearly $900 million worth of Bitcoins.
- Bitcoin crossed $70k this week and has been inching towards $800 as the market confidence in it rises. Sentiment is too high, as the Crypto Fear and Greed Index reaches 45/100.
- Rising confidence in an Iranian peace deal, the opening of the Strait of Hormuz, and the possibility of a resumption of global trade seem to be supporting Bitcoin.
- However, the market is also concerned that this might be a bull trap.
Markets See Comeback for ETFs This Week
Cryptocurrency markets have seen a solid comeback from extreme fear to a moderate zone, with the prices of bitcoin and several other cryptocurrencies rising from their rock bottoms. Bitcoin has seen a massive 10%+ growth in the last week, rising from below $70,000 to almost $78,000 at the time of writing.
The rise in crypto markets has also led to higher demand for crypto ETFs, especially bitcoin ETFs, with BlackRock, the largest bitcoin ETF, seeing inflows of $900 million over the last seven days and $167 million yesterday.
At present, BlackRock’s IBIT Bitcoin ETF holds nearly 806,000 bitcoins, compared to 775,000 held by Michael Saylor’s Strategy, making it the largest institutional fund holding Bitcoin.
Factors Causing Surge in BTC Prices
Several factors contributed to the rise in crypto market prices, including the resumption of international trade through the Straight of Hormuz, continued institutional buying of cryptocurrencies, and expectations of a Fed interest rate cut in the United States.
At the global scale, the United States and Iran have been engaging in confidence-building measures, such as talks and negotiations, to reopen the Strait of Hormuz, which controls at least 1/4th of the world’s energy supply.
Bull Trap or Sustained Recovery?
Currently, it is impossible to conclude whether the current recovery is solid or one driven by excessive short covering. The reason is that talks between the United States and Iran remain fragile and could break down at any time.
If the talks derail, it could mark the end of the current recovery, and bitcoin might plummet back below $70,000.
Disclaimer: BFM Times acts as a source of information for knowledge purposes and does not claim to be a financial advisor. Kindly consult your financial advisor before investing.
