Bitcoin price is trading at $66,867 (at the time of writing) half an hour before the daily close. Closing above $66,000 is significant, and BTC hasn’t seen prices in the $67,000 range for a month. The price increase, influenced by good news, is also supported by ETF data for some time. So, what is the latest situation in the ETF channel?
Spot Bitcoin ETF
For months, we have been witnessing IBIT and FBTC inflows trying to compensate for GBTC outflows. However, this is finally changing. For some time, GBTC has been seeing significant inflows instead of net outflows. This boosts market motivation as ETFs, launched to compete with GBTC, have not seen long-term net outflows for years. We previously discussed why GBTC would experience net outflows for months and why other ETFs would see continuous inflows initially.
Although it took weeks after Grayscale executives announced that the big sales were over and they could start turning positive, GBTC is recovering. As of May 17, GBTC saw a net inflow of $31.6 million. BITB saw $20.8 million and ARKB $10 million in inflows, bringing the total net inflow to over $62 million at the time of writing.
Now that the issue of turning red into green is resolved with net GBTC inflows, IBIT should start seeing the hundreds of millions of dollars in net inflows we have been accustomed to for months. Thus, we can quickly return to days with net inflows exceeding half a billion dollars.
Of course, the strengthening of net inflows will give investors hope for a new version of the ETF-supported rallies we saw peak in March. ETF reserves, which fell below $12 billion, have reached $14.47 billion again.
General Situation of Cryptocurrencies
Bitcoin holding above $66,000 is extremely positive. The ETF channel is supportive. The April inflation, which balanced the macroeconomic pressure, came amid Fed members talking about additional rate hikes. While things are going well, solar flares causing internet and power outages worldwide wouldn’t be surprising for crypto investors.
The only issue next week is the potential rejection decisions from the SEC on spot ETH ETFs and their scope. If all tokens with a staking aspect are targeted, and BlackRock and all other applications are simultaneously rejected, things could get complicated. The market has priced in the rejection of 2 ETFs, but more rejections or a severe reaction could mean further declines.
