Originally published on: October 31, 2024
As Bitcoin continues to attract institutional interest, the United States spot Bitcoin exchange-traded funds (ETFs) are seeing a massive influx of funds, nearing $1 billion daily. Analyst Mark Cullen warns of a potential “ETF FOMO” scenario that could drive the price of Bitcoin to a local top.
Institutional investors are pouring hundreds of millions of dollars into US spot Bitcoin ETFs on a daily basis, with data from sources like Farside Investors indicating that nearly $900 million flowed in on Oct. 30 alone. While this trend signals growing institutional interest, some market participants are cautious about a potential market reversal.
Historically, large ETF inflows have been associated with local tops in Bitcoin’s price performance. However, the current abundance of BTC available on over-the-counter (OTC) desks may help mitigate the impact of these inflows on spot prices. According to CryptoQuant, this increased availability allows ETFs to make large purchases without significantly affecting the market.
Despite the potential risks, there is optimism that the current institutional demand for Bitcoin ETFs may be sustainable. As BTC/USD hovers around $72,000, market observers are closely monitoring the balance between ETF demand and OTC availability. If the current trend continues, Bitcoin’s price could see further upside potential.
The rise in Bitcoin ETF inflows coincides with the growth of ETF products like the iShares Bitcoin Trust (IBIT), which has already accumulated $30 billion in assets under management. Analysts predict that ETF providers’ combined BTC holdings could surpass 1 million BTC soon, further fueling institutional interest in the cryptocurrency market.
As investors navigate this volatile market environment, it’s crucial to conduct thorough research and make informed decisions when trading or investing in cryptocurrencies. Stay informed with the latest market insights and trends to identify opportunities and manage risks effectively.
