New investments in Bitcoin are primarily driven by the recent approval of 10 spot Bitcoin exchange-traded funds (ETFs) in the United States as of January 11. Approximately 75% of these fresh investments in Bitcoin have originated from these ETFs, excluding Grayscale’s Bitcoin Trust (GBTC) ETF, according to a report released by CryptoQuant, an on-chain data analytics firm, on February 14.
The report highlights that over three-quarters of the recent influx of investment into Bitcoin are attributed to these ETFs. Moreover, investments from these ETFs have surged to represent 2% of the total historical investment in Bitcoin within just one month, measured by the realised market capitalisation.
Bitcoin’s value experienced a 1.8% increase in the 24-hour period leading up to February 15, trading at $52,354. On February 14, Bitcoin hit a two-year high of $51,000, pushing its market capitalization above $1 trillion for the first time since November 2021. At the time of writing, the total cryptocurrency market capitalization stands at $1.96 trillion, marking a 2.01% increase for the day.
Julio Moreno, the head of research at CryptoQuant, noted in a post on February 14 that demand for ETFs was a primary catalyst for Bitcoin’s price surge:
“Bitcoin has crossed the $50,000 mark mostly on the back of fresh demand from ETFs.”
Spot Bitcoin ETFs have collectively acquired 4,115 Bitcoin, valued at around $215 million, according to data from Farside Investors. BlackRock’s iShares Bitcoin Trust ETF leads in inflows, holding a total of 4,843 Bitcoin, worth $253 million at the time of reporting.
The CryptoQuant research report anticipates Bitcoin to surpass $56,000 as the next significant price milestone, citing network valuation perspectives and the absence of significant indicators signalling a notable price correction.
James Wo, founder and CEO of crypto investment firm DFG, concurred that ETF inflows are driving Bitcoin’s ascent to $52,000, noting that the total value of spot Bitcoin ETF products exceeds $10 billion. He highlighted BlackRock’s significant daily Bitcoin purchases, surpassing the rate of Bitcoin mining, signalling a new phase of institutional adoption through spot Bitcoin ETFs.
Despite the bullish trend, Bitcoin faces substantial resistance around the $52,000 mark, attributed to a significant number of sell orders on Bitfinex, particularly up to the $52,300 threshold, as outlined in an analysis by on-chain analyst Cole Garner on February 14.