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Bitcoin clears $55k as spot ETFs see sustained inflows

Published 27/02/2024, 01:18 pm
Updated 27/02/2024, 01:18 pm
© Reuters

Investing.com-- Bitcoin prices rose past key levels on Tuesday, boosted largely by signs of sustained capital inflows into spot exchange-traded funds which were launched earlier this year. 

The world’s largest cryptocurrency jumped 8.1% to $55,621.5 by 20:55 ET (01:55 GMT), trading at its highest level in more than two years. The token was now less than $14,000 away from a lifetime high hit during a bull run in late-2021.

World no.2 crypto Ethereum rose 3.6% to $3,217.48- its highest level since early-2022. 

Gains in Bitcoin, along with the broader crypto market, came as a report from digital asset manager Coinshares showed crypto investment products saw a fourth straight week of capital inflows. 

The report showed digital asset investment products saw weekly inflows of $598 million in the week to February 23, with Bitcoin ETFs commanding a lion’s share of the inflows. 

Bitcoin products saw $570 million of inflows, with BlackRock’s iShares Bitcoin Trust (NASDAQ:IBIT) seeing $543.5 million of inflows. This largely offset sharp outflows from Grayscale Bitcoin Trust (BTC) (NYSE:GBTC), as the trust grappled with a slew of new entrants to the Bitcoin ETF space. 

Coinshares also noted that short interest in Bitcoin was building in the wake of recent price increases. The token is trading up about 24% so far in 2024, after more than doubling in price through 2023.

Bitcoin was also supported by MicroStrategy Incorporated (NASDAQ:MSTR)- the biggest corporate holder of the token, announcing that it had recently purchased 3,000 tokens for about $155 million.

Bitcoin’s stellar rally this year was spurred chiefly by the recent U.S. approval of ETFs that directly track the price of the cryptocurrency.

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But while the approvals drew a slew of institutional capital into the token, retail trading volumes have remained relatively muted, especially as the crypto industry grapples with a mass loss of faith after a string of high-profile scandals and bankruptcies. 

Trading volumes also remained at a fraction of the highs seen during 2021 and early-2022, according to Investing.com data.

Still, increases in crypto prices spilled over into crypto stocks. No. 1 U.S. exchange Coinbase Global Inc (NASDAQ:COIN), miner Marathon Digital Holdings Inc (NASDAQ:MARA) and MicroStrategy Incorporated (NASDAQ:MSTR) surged between 15% and 22% on Monday.

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