Originally published on: August 16, 2024
The second quarter of 2024 brought a remarkable surge in institutional adoption of spot Bitcoin exchange-traded funds (ETFs), propelling Bitcoin’s price despite recent corrections.
A whopping 27% growth in institutional adoption of US-based spot Bitcoin BTC ETFs was observed in Q2 of 2024. According to Vetle Lunde, a senior analyst at K33 Research, more than 262 new firms delved into spot Bitcoin ETFs during this period, marking a substantial uptick in institutional interest.
Institutional investor participation in Bitcoin ETFs is crucial for driving the cryptocurrency’s price higher. With institutions wielding substantial capital that can impact crypto markets, continued institutional adoption is essential for Bitcoin to reach new all-time highs.
While institutional investors are increasingly flocking to Bitcoin ETFs, retail investors still dominate the cryptocurrency space. Lunde notes that institutional investors held merely 18.7% of total ETF assets under management (AUM) in Q1 of 2024.
Despite this surge in institutional adoption, the Bitcoin price struggle to breach the $60,000 psychological barrier. The leading cryptocurrency witnessed a 3.3% weekly decline, slipping below $60,000 on August 14 to trade at $58,370 on the 1-week chart.
Inflow of funds into Bitcoin ETFs has been a significant factor influencing the cryptocurrency’s price. While ETF inflows turned positive on August 15 with over $11 million, it pales in comparison to the $81.4 million outflows recorded on the previous day.
ETF inflows play a pivotal role in driving price appreciation for cryptocurrencies. Bitcoin ETFs accounted for approximately 75% of new investments in the cryptocurrency when it crossed the $50,000 mark by February 15.
With institutional adoption on the rise and ETF inflows impacting Bitcoin’s price, the cryptocurrency market is poised for significant developments. Stay ahead of the trends and explore more insightful articles by subscribing to our Markets Outlook newsletter for critical insights and investment opportunities delivered every Monday. Subscribe now and refine your trading strategies for success.
